Key Takeaways
Over the years, Elon Musk has helped form some of the most important and valuable companies in the world, propelling him to the top of the global rich list.
Off the back of a major stock market rally that has pumped Tesla’s stock price to new heights, Musk has become the first person ever to amass a personal fortune of more than $400 billion.
In fact, both Forbes and Bloomberg calculate Musk’s net worth to be in excess of $430 billion, even though his biggest investment to date, $44 billion to purchase X, formerly Twitter, in 2022, has, by most estimates, been a financial disaster.
A prolific American business leader, Musk first made his fortune as a co-founder of PayPal.
When PayPal was sold to eBay in 2002, he received $175.8 million for his shares. The same year, he founded SpaceX using some of that money.
In 2004, Musk led Tesla’s Series A funding round, contributing $6.35 million to become the largest shareholder.
Since then, he has continued his entrepreneurial streak, helping launch ventures such as Neuralink, Hyperloop, and OpenAI.
The largest chunk of Musk’s wealth can be attributed to his 17% stake in Tesla, which has seen its market capitalization grow to over a trillion dollars since Trump’s election.
After Tesla, Musk’s next most valuable asset is his 30% stake in SpaceX, a privately held company that was valued at $180 billion when it last raised capital in December 2023. More recently, Bloomberg reported on a prospective tender offer that valued the company at $210 billion.
Together, Tesla and SpaceX account for more than 90% of Musk’s net worth. Meanwhile, if the latest estimates are to be believed, Musk’s estimated 42% stake in X Corp is little more than pocket change in comparison.
Although Musk initially paid $44 billion to take the company private, a recent filing from Fidelity, which holds a small number of X shares, valued it at just $9.4 billion. In other words, the social media platform makes up around 1.2% of Musk’s entire net worth.
While Tesla’s growth so far has been impressive, skeptics have questioned whether its high valuation is justified.
In the third quarter of 2024, Tesla’s revenues were outpaced by Chinese electric vehicle rival BYD for the first time.
Meanwhile, although upstart electric players are closing the gap, traditional automakers still generate the highest revenues. Nevertheless, Tesla is more valuable than any of them.
With a high price-to-earnings ratio, which is more characteristic of a technology startup than a car company, Tesla’s stock market value is based on the expectation of future earnings growth.
However, for that growth to materialize, the company will need to dominate the nascent market for self-driving technology.
Musk himself has emphasized this point on several occasions. For example, in 2022, he said full self-driving “is the difference between Tesla being worth a lot of money or worth basically zero.”
With startups like Wayve promising to reshape the autonomous driving market and Google’s Waymo securing an early lead in the U.S. robotaxi race, the expectation that Tesla will be the first to profit from the coming transport revolution may prove wrong.
But even if the firm does lose its position as the world’s most valuable car company, Musk’s second-most profitable venture could secure his spot at the top of the rich list.
For years, Tesla was the golden child of Musk’s post-PayPal entrepreneurial gamble. But since it started launching rockets multiple times a week, SpaceX has also risen to prominence.
In 2021, Morgan Stanley surveyed its clients and found that the majority of them believe SpaceX may one day command a higher valuation than Tesla.
More recently, similar predictions have followed from the likes of Barron’s and The Economist , which have speculated that the potential market for space flight has ample room for growth. At the moment, few other companies are growing into it.
Another key factor that could propel SpaceX to the big leagues is Starlink, its internet-transmitting subsidiary that could eventually rival ground-based telecommunications giants.
After Tesla and SpaceX, Musk’s next most successful business endeavor was xAI, the AI startup he founded “to understand the true nature of the universe.”
Bringing together an all-star team of leading AI researchers including Igor Babuschkin and Christian Szegedy, the company works closely with other Musk-affiliated enterprises.
Earlier this year, xAI completed the construction of a 100,000 GPU supercomputer that Musk boasted was the world’s most powerful.
Fresh off the back of that, the startup recently closed a $6 billion funding round that makes it one of the most valuable AI labs in the world. Previously, the the Wall Street Journal reported on that xAI’s latest fundraise assigns the company a $50 billion valuation.
The high valuation could be viewed as a vote of confidence in xAI’s flagship chatbot, Grok, or perhaps simply as a sign of investors’ confidence in Musk (especially given his alliance with President-Elect Donald Trump).
Aside from Tesla, SpaceX, and xAI, Musk’s other ventures include Neuralink and Hyperloop.
While these companies are far from generating a profit, given Musk’s track record for turning futuristic concepts into a reality, they may one day become multi-billion-dollar enterprises, too.
Finally, it is worth noting that the decline in X’s valuation results from an exodus of advertisers and subsequent drying up of income. However, in his comments, Musk has clarified that he doesn’t want the company to follow the traditional social media business model.
Instead, he is more interested in turning X into an “everything app” that could generate revenue from payments and additional services like AI.
“I don’t create companies for the sake of creating companies, but to get things done.”
“When Henry Ford made cheap, reliable cars, people said, ‘Nah, what’s wrong with a horse?’ That was a huge bet he made, and it worked.”
“Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”
“It’s OK to have your eggs in one basket as long as you control what happens to that basket.”