Fidelity Raises Valuation of Elon Musk's X and xAI to New Heights

Recent filings reveal that Fidelity has again raised the valuation of its stakes in X and xAI, marking the second consecutive month of growth for the two Elon Musk-led companies. Notably, xAI recently secured $6 billion in new funding, with Fidelity among the participating investors.

According to the filings, this marks the second consecutive month that the mutual-fund giant increased the value of its stakes in xAI and the social-media platform X. The Fidelity Blue Chip Growth Fund reported valuing its xAI shares at $79,857,865 as of the end of November, reflecting a 6.4% rise from October’s valuation of $75,062,706 and a significant increase from $44,152,362 in September.

The fund's annual report, published in late September, stated that it owned 3,688,585 xAI shares as of the end of July, acquired on May 13 for a total of $44,152,000.

xAI recently completed a highly anticipated $6 billion funding round, with Fidelity joining other prominent investors, including A16z, BlackRock, Kingdom Holding, and Lightspeed. The funding was confirmed in a December 23 blog post.

The current number of xAI shares held by the Blue Chip Growth Fund is unclear, but previous filings indicate that the share price increased from $11.96 in September to $20.35 in October.

Musk's acquisition of X has shown signs of recovery from earlier losses. According to filings, Fidelity's Blue Chip Growth Fund increased the valuation of its shares in X to $5,797,734 in November, marking a 5% rise from October's valuation of $5,530,358 and a substantial 39% increase from September's $4,185,614.

Musk's 2022 acquisition was widely criticized as one of the most overvalued tech deals in recent history. However, the platform has proven beneficial for Musk, particularly in supporting Donald Trump’s reelection campaign, positioning him to wield considerable influence in the incoming administration. Additionally, X has become a valuable source of training data for xAI, enabling the development of advanced AI models that rival those from industry leaders like OpenAI and Google.

However, the X deal has yet to deliver significant returns for investors. Despite two consecutive months of increases, Fidelity still values its stake in X much lower than it did in late 2022, when Musk acquired the platform for $44 billion. Earlier filings show that Fidelity's Blue Chip Growth Fund invested $19.66 million at the time.

Fidelity representatives declined to comment on Monday, and representatives for X and Musk did not respond to requests for comment. Correction: December 31, 2024 — An earlier version of this story incorrectly stated the number of consecutive months Fidelity had increased the value of its stake in xAI and X. The correct number is two months in a row.