Pierre Ferragu, an analyst at New Street Research, long-time Tesla Inc. TSLA advocate, and Grok investor, believes that the $113 billion market cap of Elon Musk's latest merger will soon seem modest.
What Happened: Ferragu reacted positively to the news that Musk is merging xAI with his social media platform X in a deal valuing the combined entity at $113 billion.
"Oh yes. The global town square is taking a massive step up," Ferragu said X, adding that the $113 billion valuation "will look tiny in a few years," highlighting his bullish outlook on the growth potential of the merged companies.
"So much potential," he said, while also noting, "I am biased, do your own research."
Why It Matters: The all-stock deal combines xAI, which Musk launched to rival ChatGPT-parent OpenAI, with X, formerly Twitter, which he acquired for $44 billion in October 2022.
Musk said the merger will unify "data, models, compute, distribution and talent" under a new holding company, xAI Holdings Corp. The move values xAI at $80 billion and X at $33 billion.
Musk has a history of merging his own companies. In 2016, he leveraged Tesla stock to acquire SolarCity, his solar energy venture.
His other privately held enterprises include SpaceX, which focuses on rocket technology; Neuralink, a company developing brain-implant chips; and The Boring Company, specializing in tunnel construction.
Photo courtesy: Shutterstock
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