Elon Musk’s AI startup, xAI (PC:XAIIQ), is reportedly having a hard time selling its Grok AI models to other companies, according to The Information. The company has hired over a dozen salespeople to grow its business, but its lack of experience is making some potential clients hesitant. While big names like Morgan Stanley (MS) and Palantir (PLTR) have agreed to test xAI’s technology, their trials are reportedly small and only generating hundreds of thousands to a few million dollars in revenue, the report said, citing two former xAI employees.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
The situation is further complicated by the fact that some Tesla (TSLA) employees (a company also led by Musk) have chosen to use AI models from xAI’s competitors instead. Despite these issues, xAI continues to aim high. Notably, documents shared by its banker, Morgan Stanley, in June showed that the company expects to reach $13 billion in yearly earnings by 2029.
In addition, CNBC reported in November that xAI is on track to close a $15 billion funding round at a $230 billion pre-money valuation, with the deal expected to finalize on December 19. Nevertheless, xAI’s rivals are also seeing their valuations rise. In fact, OpenAI reached a $500 billion valuation in October following a secondary stock sale, while Anthropic jumped to $350 billion in November after receiving investments from Microsoft (MSFT) and Nvidia (NVDA).
What Is the Prediction for Tesla Stock?
When it comes to Elon Musk’s companies, most of them are privately held. However, retail investors can invest in his most popular company, Tesla (TSLA). Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 12 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $386.42 per share implies 18.7% downside risk.
