Elon Musk wagered a huge bet on Donald Trump winning the White House – and that bet is already paying off.
Musk spent about $130 million on the Trump campaign and related conservative efforts. And ever since it became clear that Trump won a second term in the White House, Tesla (TSLA) stock has surged higher. And Musk’s net worth has grown by over $30 billion.
How’s that for a return on investment? Musk committed $130 million to make more than $30 billion in just a few days.
And his economic gains may just be getting started.
Though, that wealth isn’t coming from Tesla stock alone. Rather, Musk stands to make even more money on his “Trump bet” through another one of his ventures – xAI.
Musk’s AI startup is working to create foundational AI models, similar to OpenAI’s ChatGPT. Currently, while an impressive venture that may soon command a $40 billion valuation, xAI is a laggard in the ongoing AI Race, with companies like Anthropic and OpenAI leading the pack.
Indeed, xAI could very well become the leader in the AI Race. And that’s good news for Elon Musk – and even better news for investors piling in today.
Three Reasons Why xAI Could Soon Lead the Pack
We see three big reasons why xAI could soon dominate the AI industry.
1: Donald Trump and Elon Musk’s Friendship
As a late-comer to the AI Race, xAI has not yet established firm connections with the U.S. government. Instead, thus far, the government has chosen to work with companies like OpenAI and Anthropic to integrate generative AI technologies into various departments.
But now that Musk has helped Trump to win back the White House, it seems likely that the U.S. government will start working with xAI on its next-gen AI initiatives. So, not only should the startup receive an invitation to this party, if you will; it will likely be the guest of honor.
2: J.D. Vance’s Distaste for Current Leading AI Models
Given his venture capital roots and ties to Silicon Valley, we increasingly see J.D. Vance as the “tech guy” in this leadership duo. And as it turns out, he doesn’t seem to like the AI industry’s current leading models.
Earlier this year, Vance posted on X, claiming that one of the biggest issues with AI is “a partisan group of crazy people who use AI to infect every part of the information economy with left-wing bias.” He went on to say that, “Gemini can’t produce accurate history. ChatGPT promotes genocidal concepts.”
As of this moment, Gemini and ChatGPT are considered two of the leading foundational AI models in the market – and are direct competitors to xAI.
Given Vance’s seeming distaste for those models, it seems likely that the Trump administration will do what it can to support accelerated xAI development and deployment.
3: The Anticipated Removal of a Biden-Era AI Executive Order
Back in October 2023, U.S. President Joe Biden passed an executive order requiring developers of foundational AI models to share safety test results and other critical information with the U.S. government. The order subjects companies like OpenAI and xAI to red-teaming exercises by The National Institute of Standards and Technology (NIST).
It is widely presumed that Trump will repeal this executive order, removing a lot of the red tape around developing foundational AI models. With those barriers eliminated, companies like xAI should be able to build and deploy new AI models faster than ever before – providing a boost, of course, to xAI.
The Final Word
For these three big reasons, we think xAI is on the “launch pad” for enormous growth and expansion over the next few years, fueled by the Trump-Musk alliance.
Meanwhile, the stock market is poised for a seismic shift, with xAI at the epicenter of a technological revolution that could redefine investment landscapes by 2025.
In fact, we think that xAI could become the crown jewel in Musk’s empire, potentially outpacing even his most successful ventures.
This growth trajectory could send shockwaves through the AI market…
And we’ve found a compelling “backdoor” way to play it.
This under-the-radar opportunity offers exposure to xAI’s potential without the hurdles involved with venture capital and high-profile tech stocks.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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