It literally didn’t. It said the valuation of the company doubled. That’s good for people who already held shares before this investment round, because it indicates those shares are worth more than the previous estimate.
The value of the equity (or equivalents) bought in this round hasn’t doubled since, and won’t change until some other valuation event happens.
Actually we don’t even know who are the new round of investors.
Are they the same as the old round and are they connected together , then they just artificially pump up their own original investment by this accounting trick.
They could do quid pro quo deals. I invest in your AI start up X amount , you invest in mine X amount, and we both suddenly double our money.
Suffice to say the 50 billion number is a joke and and easy way to try and fob off debtors.
We know some of them.
Here’s their series B in July 2023:
Our Series B funding round of $6 billion with participation from key investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others.
And here’s this round, I linked it above:
Qatar Investment Authority, Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz are said to have participated in the financing round.
So yes, Sequoia and Andreessen (and Valor) will mark up the value of the equity they bought in the first round, but they’re still putting in more money (for less equity) in this round, which means they genuinely think it’s worth more now.
We don’t have the complete lists but probably some investors didn’t join this round, and some new ones did. It’s a consensus.
Who held the shares from the 1st round 
.
Damn I was right lol.
Now you understand what I’m saying. Their new round of investing helped to so called ‘double the value’ of their first investment.
I mean, this is all completely normal. You’re basically dismissing the whole concept of startup fundraising and valuation here. And yes, it’s not a perfect system, but it’s exactly how the whole startup world works all the time.
And eventually these valuations are the basis for IPO prices, at which point the retail market usually roughly agrees with them, suggesting they’re not total nonsense.
I think completely normal not quite correct if you see that Musk is offloading shares of it in some kind of debt deal to try and make X look more financially viable.
Looks very incestuous. I wouldn’t invest in that round of incest if I had the money anyway.
Also pretty normal! That’s how investors (and employees) in private companies realize profits. It’s called a liquidity event. They can’t just sell their shares on the public market, and there are usually restrictions on selling them privately (to avoid weird ownership problems), so you do it during a fundraising round.
This one looks dodgier because it’s related to X valuation and the debts it’s holding.
I don’t need your lecture on venture capital I know how it works as I explained the maths looks really dodgy along with their instant doubling in value.
Only because Twitter investors hold some shares in it. Totally normal!
And to be honest it’s pretty clear you don’t know how it works. This is all how it works. Nothing in the article is unusual.
Nah I know how it works I know a 10% investment doesn’t double the valuation .
That’s not normal, especially when the 2nd round had many of the same investors.
That’s frankly ridiculous.and no most banks wouldn’t accept it as collateral for debts.
I understand venture capital, stocks and crypto very well.
Correct. The investment didn’t double the valuation. The investment reflected an updated valuation because the company has become more valuable since the last investment round.
(Well, the investment didn’t double the value. The valuation is an estimate of value. The investment changed the estimate)
Yeah whatever man, it all hinged on this new round which was just an investment of 10%, many of which are the same investors , which then crystallized this so called doubling in value overnight.
Effectively it’s just a way of hugely inflating their current holdings rapidly. Wouldn’t touch these guys with a bargepole. They probably worked out some other deals with Musk in the background, after all spaceX is also rumoured to be going public.
Do you feel the same way about the OpenAI investment round I quoted above? That one made them instantly eleven times more valuable!
OpenAI’s meteoric rise in terms of product popularity and valuation has captured the world’s imagination. Since the launch of ChatGPT, it has attracted 250 million weekly active users. The company’s valuation has also risen from $14 billion in 2021 to $157 billion as it grew revenue from zero to $3.6 billion, far exceeding Altman’s own projections at the time.
Open AI is a leader in this space and has actual products that are doing well, that’s different.
Okay, so the difference is your personal feelings about the companies, rather than anything about the mechanism of investments changing valuations?
No it’s not.
The difference is Open AI is the world leader in AI with actual products and services that are widely utilised and has paying customers.
If you can’t see that then you are playing dumb.
Also I didn’t say what I thought about OpenAI valuation as I haven’t researched it.
I do see this double your own money instantly in an unproven startup by adding in 10% more ,at double the price of the old shares you bought , so you can then claim everything is worth double , and just laugh at it .
I’m not suggesting OpenAI’s valuation is wrong. I’m asking why you insist that xAI’s valuation changing during an investment round is “obviously dodgy math”, when it’s identical to the way OpenAI’s current valuation was derived.
Sure, he can try, if other people are willing to give him money at a certain valuation. Just like you can try to sell any given stock,.your car, your house, etc at whatever price you want, but it’ll only sell if other people agree on the valuation.