AI Chatbot Concept in Front of Suit Man

How to Invest in xAI Stock in 2024

Published Jul 9, 2024
Reviewed by Bryan Junus, CFA
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Elon Musk has a new startup focused exclusively on artificial intelligence.

The mission for xAI is “to understand the true nature of the universe” and to be maximally truth-seeking to help filter out and prevent the spread of misinformation.

An obvious use case for this technology is X (formerly Twitter), another Musk-led company. Currently, xAI has only one live product: Grok. Grok is a chatbot integrated with X and is only available to X's Premium+ subscribers.

The xAI team, which includes veterans from powerhouses like Google and OpenAI, also wants to create an AI capable of advanced mathematical reasoning. If successful, this could lead to solving puzzles about the Earth, our solar system, and beyond.

Unsurprisingly, there's no shortage of investors trying to get exposure to the Musk-led AI company. xAI just raised $6 billion at a $24 billion valuation from a handful of venture capital and private equity firms.

You may be able to invest in it, too.

How to buy xAI stock

xAI is a private company, which means it doesn't have a stock symbol or trade on a public exchange.

However, accredited investors can buy shares on Hiive, a pre-IPO marketplace.

Accreditation requirements

To qualify as an accredited investor, you must meet one of the following criteria:

  • Have an annual income of $200,000 individually or $300,000 jointly.
  • Have a net worth that exceeds $1,000,000, excluding your main residence.
  • Be a qualifying financial professional.

Hiive is an investment platform where accredited investors can buy shares of private, VC-backed startups.

Some of the most active companies on Hiive right now are SpaceX, OpenAI, and xAI:

Xai Icon Hiive

Each listing of xAI stock is created by a unique seller who may be an employee, venture capitalist, or angel investor. Each seller sets their own asking price and quantity of shares for sale.

Buyers can see each listing, accept a seller's asking price as listed, place bids and negotiate with sellers, or add a company to their watchlist. They can also see all recent transactions (prices and quantity of shares traded).

See what shares of xAI are trading for on the pre-IPO market by creating an account:

Can retail investors buy xAI stock?

Because of federal regulations, retail (non-accredited) investors are not able to invest in private companies.

While there's no way for you to buy shares of xAI directly, you can get exposure to the company via the ARK Venture Fund. As of June 24, 2024, x.AI makes up 1.8% of the fund and is its 18th largest holding.

This is a fairly small position, but the Venture Fund also has stakes in a number of other private companies that may be of interest. SpaceX, Epic Games, Anthropic, Figure AI, and OpenAI are all part of the fund's top 10 holdings.

Retail investors can invest in the Fund via Titan or SoFi. Accredited investors can buy it directly from Ark's website.

Alternatives to investing in xAI

Here's a list of other AI-related investment opportunities you may be interested in.

1. Publicly traded AI companies

For retail investors, the easiest way to invest in AI is to buy publicly traded stock.

  • Nvidia (NVDA) is the market leader in developing the chips used to train and run supercomputers and AI networks. Musk was recently in the headlines for asking Nvidia to ship thousands of AI chips reserved for Tesla to xAI and X instead.
  • Taiwan Semiconductor (TSM) is the sole manufacturer of Nvidia's AI GPUs. The company does not design any of its own chips; it only builds chips for its clients.
  • Microsoft (MSFT) has invested $11 billion in OpenAI, owns 49% of the company, and is entitled to up to 75% of its profits. It's also integrating the lab's technology into its existing suite of products, including Office 365 and GitHub.
  • Alphabet (GOOGL) is positioned to be the biggest winner from AI-powered search. Additionally, its chatbot (Gemini) is a competitor to OpenAI, and its Google Cloud Platform is likely to host a number of future AI applications.
  • Amazon (AMZN) runs Amazon Web Services (AWS), the world's largest cloud computing provider. A significant amount of future AI computing will likely be run on its servers.

Dell (DELL) was also contracted to build half of the racks needed to power xAI's new Memphis-based supercomputer.

While none of these companies are working on the exact same problems as xAI, they either benefit from or are themselves investing heavily in artificial intelligence.

2. ETFs and private funds

If you don't want to invest in a specific stock but want exposure to the industry, here are a few options:

  • The Roundhill Generative AI & Technology ETF (CHAT) invests in companies focused on generative AI.
  • The Themes Generative Artificial Intelligence ETF (WISE) owns stocks that generate their revenue from AI, big analytics and data, natural language processing, or AI-driven services.

There are also funds that allow you to invest in privately held companies:

  • The ARK Venture Fund (mentioned above) invests in innovative companies, regardless of whether they're publicly traded or privately held.
  • The Fundrise Innovation Fund gives retail investors access to a portfolio of privately held tech companies like Anthropic, Anyscale, Anduril, Databricks, and more. The minimum investment is just $10.

3. Other private AI companies

Here are a few other AI-centric private companies I've written about:

All of these companies have shares available for purchase on Hiive.

For more investment ideas, check out our article on how to invest in artificial intelligence.

When will xAI IPO?

You should not expect xAI to become publicly traded in the near future. In fact, it may never become a public company.

Tesla is Musk's only publicly traded company. By keeping xAI private, he can run it independently of a board of directors and without needing to report to shareholders. 

This gives him more flexibility, more regulatory latitude, and allows him to patiently work toward his grandiose vision.

Plus, as evidenced by the $6 billion he raised in May, he has no issue raising funds in the private markets.

Elon Musk and OpenAI

Musk was a co-founder of OpenAI and invested $50 million to start the lab.

In 2018, Musk sold his stake to Microsoft and left the company over disputes about the company's lack of safety guardrails. 

He also filed a lawsuit against Sam Altman (which has since been withdrawn), his co-founder and the current CEO of OpenAI, claiming Altman breached their contract by abandoning their not-for-profit mission.

xAI is a direct competitor of OpenAI. Musk has a golden opportunity to differentiate xAI with responsible and transparent practices, areas he's publicly criticized OpenAI for in the past.

How much is xAI worth?

In May 2024, xAI raised $6 billion in its series B, which valued the company at $24 billion.

This was the largest series B in the history of venture capital. The previous record was $300 million. xAI, which was officially launched in July 2023, is now the 12th most valuable startup in the world.

Investors in the round included Andreessen Horowitz (a16z), Sequoia Capital, Fidelity Management & Research Company, Valor Equity Partners, Ark Investment Management, and more.

Any views expressed here do not necessarily reflect the views of Hiive Markets Limited (“Hiive”) or any of its affiliates. Stock Analysis is not a broker dealer or investment adviser. This communication is for informational purposes only, and is not a recommendation, solicitation, or research report relating to any investment strategy, security, or digital asset. All investment involves risk, including the loss of principal and past performance does not guarantee future results. There is no guarantee that any statements or opinions provided herein will prove to be correct. Stock Analysis may be compensated for user activity resulting from readers clicking on Hiive affiliate links. Hiive is a registered broker-dealer and member of FINRA / SIPC. Find Hiive on BrokerCheck.

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