Elon Musk’s X Seeks Funding to Restore $44B Valuation

Elon Musk's social media platform, X, is reportedly exploring fresh investment opportunities aimed at restoring its valuation to the $44 billion Musk initially paid when acquiring the platform, previously known as Twitter, in 2022. Bloomberg News, citing sources familiar with the discussions, reported that negotiations are ongoing and subject to change. If successful, this would mark the first publicly disclosed funding round since Musk assumed control.

X has encountered significant financial challenges since the acquisition, including an advertiser pullback linked to concerns about content moderation and Musk’s public remarks. Fidelity Investments, one of the original financial backers of the acquisition, had reduced its valuation estimate of X by nearly 72 per cent as of October 2023.

The platform’s trajectory has taken a new turn following Donald Trump’s victory in the 2024 U.S. presidential election, granting Musk potential influence within the federal administration. Concurrently, Musk’s other ventures have strengthened financially, with Tesla experiencing a stock price surge post-election and SpaceX reaching a $350 billion valuation as of December 2024, positioning it as the most valuable tech startup globally.

Musk’s artificial intelligence enterprise, xAI, has also witnessed significant investment. The company secured $6 billion in funding at a valuation of $50 billion, with reports indicating potential additional fundraising that could raise its valuation to $75 billion. X maintains an approximately $6 billion stake in xAI, a factor that could contribute to its financial rebound.

xAI recently introduced its latest artificial intelligence model, Grok 3, which it claims outperforms systems developed by Google, OpenAI, Anthropic, and DeepSeek. In response, X has incorporated Grok into its subscription-based services, adjusting the pricing structure of its Premium+ plan to nearly $50 per month.

Despite advancements in AI and technology integration, X continues to navigate revenue challenges. Advertising revenue reportedly declined by up to 28 per cent in 2024 compared to the previous year. However, major advertisers, including Apple, have resumed partnerships with the platform. X CEO Linda Yaccarino stated in January that 90 per cent of brands that had previously suspended advertising have since returned.

In addition to revenue recovery efforts, X faces regulatory scrutiny. In January 2025, just ahead of the Trump administration assuming office, the U.S. Securities and Exchange Commission (SEC) filed charges against Musk, alleging he undercompensated Twitter investors by at least $150 million during the acquisition process.