• Advertisers return after exodus over platform concerns
• Can create network effects with Musk’s other ventures
• Sovereign wealth funds weigh investment in new round

X, the social media platform formerly known as Twitter, expects to eventually return to a US stock exchange through an initial public offering of its parent company, xAI, CEO Linda Yaccarino said.

Speaking on the sidelines of the Milken Institute Global Conference in Los Angeles, Yaccarino emphasized that it is still too early to discuss a timeline for an IPO, as xAI is only two years old.

However, two xAI investors said a listing could occur as soon as late 2026 or the first half of 2027, though they acknowledged the timing is uncertain. A third investor expressed skepticism, noting that his firm is not currently modeling an exit in that timeframe.

The San Francisco-based startup continues to attract strong interest from private capital. Venture firms, private equity players, strategics, and sovereign wealth funds are all vying for a stake in Elon Musk’s fast-growing AI business.

Two directors from Middle Eastern sovereign wealth funds and a prominent American venture capitalist at the Milken conference confirmed they are considering investments in xAI, which is seeking to raise USD 20bn at a valuation exceeding USD 120bn, as reported.

The fundraising round remains open, they said, and follows a USD 6bn Series C completed in December 2024. Investors in that round included Andreessen Horowitz (a16z), BlackRock, Morgan Stanley, Omar Investment Authority, Qatar Investment Authority, MGX, Lightspeed Venture Partners, Sequoia Capital, Fidelity Management & Research, Kingdom Holdings, and Nvidia.

Jim Breyer, CEO of Breyer Capital and an existing xAI backer, said he is weighing whether to join the current round. He praised the company’s technical leadership and said he believes xAI can go public on its own terms. The final decision, he noted, will rest with Musk, business partner Omead Afshar, and their advisors.

In March, xAI acquired X in an all-stock deal valued at USD 33bn – less than the USD 44bn that Musk originally paid for Twitter in 2022. The combined company is now valued at USD 80bn, according to a company statement, which noted that “xAI and X’s futures are intertwined.”

A sector advisor highlighted the significant network effects xAI can harness from Musk’s other ventures like Starlink and Tesla. xAI also recently launched a standalone app for its AI assistant Grok, which is expected to generate additional revenue.

Prior to acquiring X, xAI was generating around USD 100m in annual recurring revenue, according to the advisor. Meanwhile, research firm eMarketer estimates that X’s global ad sales will grow by 16.5% in 2025 to USD 2.26bn, as advertisers return to the platform amid Musk’s increasing political influence as part of the Trump administration.

Over the past two years, X experienced a major advertiser exodus due to concerns about content moderation and the rise of hate speech. Musk’s controversial public statements and actions further strained brand relationships.

At the Milken event, during a panel titled “Reputation Roundup: Corporate Leaders Building Trust,” Yaccarino stated that 96 of X’s top 100 advertisers have returned.

She also noted that upon Musk’s acquisition of Twitter, it became clear the platform had significant child-protection issues. The company has since invested heavily in automation tools and human oversight to address bad actors and combat antisemitism. Yaccarino added that X is not designed for children, and fewer than one million US users fall into that category. X has 600 million active users in total.

Young adults, particularly Gen Z, are now a core demographic for X, comprising one-third of its user base and driving much of its growth.

“They love the come-as-you-are environment,” Yaccarino said. “They demand transparency and authenticity – and of course, they love the humor and memes.”

Gen Z is projected to wield USD 36tn in spending power by 2030, she added.

One xAI investor said the company must differentiate itself from other major large language model (LLM) platforms like OpenAI and Anthropic before any potential IPO. While xAI benefits from proprietary data across Musk’s companies, long-term success will require further product distinction, especially as LLMs approach technical parity.

Another investor suggested xAI may be better off waiting until peer companies go public first.

Of Musk’s ventures, only Tesla is currently publicly traded. He has clashed with regulators in the past and tends to favor the privacy of private capital markets — factors that may delay any IPO. Investors also noted that Musk’s polarizing reputation could be a liability in public markets.

xAI did not respond to a request for comment.

When asked when a potential IPO was likely, Yaccarino advised this news service to “ask Grok”, xAI’s chatbot.

So, this news service did, and Grok noted that “Musk has a history of keeping his ventures private for extended periods,” adding that an offering could still be “years away — if it happens at all — given his preference for avoiding public market scrutiny. Market conditions, financial performance and strategic goals will ultimately shape the decision.”

by Troy Hooper, Cristiano Dalla Bona, and Michelle Cheng