Elon Musk’s X is seeking $44 billion in fresh funding, an amount equal to what Musk paid to acquire Twitter in 2022, according to a new report from Bloomberg. The fundraising effort comes as X faces growing financial pressure, with its lenders reportedly struggling to sell off debt tied to the initial acquisition.
Meanwhile, the company is aggressively expanding into artificial intelligence, short-form video, and digital finance, industries that require significant investment but offer uncertain revenue prospects.
Musk has long promoted the idea of transforming X into an “everything app,” integrating AI, fintech, and social media into a single ecosystem. However, with banks selling off X’s debt at a discount and revenue streams still unstable, the fundraising raises questions: is this a move to push X into new markets, or a financial necessity to keep the platform afloat?
Banks Offload X’s Debt, Signaling Investor Caution
Since Musk’s takeover, X has faced declining ad revenue and struggles with subscription growth. In a leaked company email, Musk admitted, “Our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even.” With traditional revenue streams faltering, lenders who financed Musk’s acquisition—including Morgan Stanley and Barclays—are reportedly trying to offload $13 billion in debt at a loss.
Reports indicate that banks are struggling to find buyers willing to take on X’s debt at face value, signaling doubts about the company’s financial future. The situation mirrors concerns raised by advertisers, many of whom pulled back from X following policy changes under Musk’s leadership.
Grok 3 and X’s AI Expansion
Despite financial uncertainty, Musk is investing heavily in artificial intelligence. xAI just unveiled Grok 3, a language model that Musk claims outperforms OpenAI’s GPT models in certain benchmarks.
While these results position Grok 3 as a competitive AI model, it still faces a steep challenge in gaining market adoption. OpenAI, Google, and Anthropic currently dominate the AI space, with models deeply integrated into major products and services. To make Grok a viable competitor, X will need to invest heavily in AI infrastructure and developer partnerships.
Short-Form Video: X’s Bid to Challenge TikTok and YouTube
Another key area of expansion for X is short-form video. The company recently introduced a vertical video feed, a move designed to take on TikTok, YouTube Shorts, and Instagram Reels. Musk has repeatedly emphasized video content as a critical component of X’s future, hoping to drive engagement and monetization.
However, X faces an uphill battle against entrenched players. YouTube offers a structured ad-revenue-sharing model for creators, while TikTok has built a massive influencer ecosystem with direct monetization tools. X, on the other hand, has yet to introduce a robust monetization system for video creators, which could limit its ability to attract top-tier talent.
X Money and Musk’s Push Into Fintech
Beyond AI and video, X is attempting to break into the digital payments space with the launch of X Money, a payment wallet built in collaboration with Visa. Musk envisions the platform evolving into a WeChat-like “super app” that merges social media, messaging, and financial transactions.
Visa’s role is aimed to empower X Money’s payment infrastructure, enabling peer-to-peer transactions and potential future integrations for e-commerce. While the partnership signals Visa’s confidence in X’s financial ambitions, it remains unclear how the platform plans to compete against established fintech giants like Apple Pay, Google Pay, and PayPal.
Regulatory challenges could also slow the expansion of X Money. Digital payment platforms require compliance with strict banking regulations across multiple jurisdictions. X has yet to secure the necessary money transmitter licenses in all regions where it plans to operate, and regulatory scrutiny—especially under laws like the EU’s Digital Services Act—could present further obstacles.
Will Investors Back Musk’s $44 Billion Plan?
Musk’s attempt to raise $44 billion comes at a difficult time for the tech sector. Rising interest rates, a decline in speculative investments, and investor skepticism toward high-risk ventures make securing large-scale funding a challenge. While Musk has successfully raised billions for Tesla and SpaceX, X’s financial instability makes it a riskier proposition.
Whether investors see AI, video, and fintech as viable growth areas for X will determine the success of this funding round. However, the fact that banks are offloading X’s debt suggests that even financial institutions have doubts about the company’s long-term profitability.
Musk’s broader vision for X as an all-encompassing digital platform is ambitious, but without clear revenue models, investor confidence may remain low. If X fails to secure the $44 billion it seeks, the company will need to explore alternative funding strategies—or make significant operational changes—to remain financially viable.
