Elon Musk may have a plan to save X, and it doesn't involve advertising, free speech, or financial services.

The big picture: Musk has publicly admitted that he overpaid for what was then known as Twitter, as did his co-investors. It's still unprofitable, with decreased revenue and increased debt.

• Last week, Musk literally told Disney and other boycotting advertisers to "go fuck yourselves."
• This could have been read as a corporate suicide note, particularly by those charged with reviving the business that Musk acquired.
• But an alt take is that Musk is already minimizing that business, at least as a revenue and valuation driver, in favor of the OpenAI rival he launched earlier this year.

Behind the scenes: X.ai Corp. yesterday disclosed in an SEC filing that it's raising up to $1 billion in equity funding, with nearly $135 million already banked. No investors were listed.

• It's unclear if X.ai sits under the same corporate umbrella (X Holdings Corp.) as X Corp. (nee Twitter), and an X Corp. spokesman said he "can't share anything" in that regard.
• But it would make sense that they share structural DNA, particularly given that X.ai is expected to leverage the flagship's content and user base.
• For those who helped to finance the Twitter takeover at $44 billion, this could mean both direct equity exposure to X.ai plus the right to invest more.

Why it matters: Were X.ai to eventually become valued at where OpenAI sits today — at the relative dawn of generative AI adoption — then those "Twitter" shareholders would be deep in the black.

Caveats: To be clear, that's a very optimistic bull case. X.ai is staring up a steep hill, even if it gets to ride ChatGPT's coattails.

• It's also expensive. Musk may have access to some excess cloud computing space via his vast business empire, but he'd still need billions of dollars to compete with all the Azure and AWS credits that companies like OpenAI and Anthropic have received in exchange for equity.

The bottom line: Musk, via email, would only say: "I have never lost money for those who invest in me and I am not starting now."

OpenView Venture Partners has suspended investing in new companies and laid off most of its employees, less than a year after raising $570 million for its seventh fund.

Why it's the BFD: It's not unheard of for VC firms to shut down, even after securing commitments for a new fund. But I can't remember one ever doing so after calling down around 20% of that fund, in a valuation environment that should benefit its expansion-stage strategy.

• News of the fund suspension and layoffs were first reported by The Information.

History: OpenView was founded in 2006, and counts Datadog as its biggest homerun. It fell short of target with Fund VII, but $570 million was still significantly more than it had ever raised.

Behind the scenes: Sources say that at least one of OpenView's senior partners, Mackey Craven, no longer wanted to continue with Fund VII. This would have triggered a keyman clause, given the prior departure of partner Ricky Pelletier (who left in April).

• But OpenView decided to preemptively suspend, and yesterday told LPs that the firm would provide a new strategic plan within three to six months.
• As for why two top partners bailed, putting dozens of people out of work just before the holidays, sources remain hazy. But it sounds like a strategic/financial disagreement, not wrongdoing. Still working on it... The firm is declining to comment.

• Pragmatic, a British semiconductor tech firm, held a £162m first close on its Series D round. M&G's Catalyst and UK Infrastructure Bank co-led, and were joined by Northern Gritstone, Latitude, MVolution Partners and insiders British Patient Capital, Cambridge Innovation Capital, and Prosperity7 Ventures. https://axios.link/488rcmR

• Vast Data, a New York-based AI data platform company, raised $118m in Series E funding at a $9.1b valuation. Fidelity led, and was joined by NEA, Drive Capital and Bond Capital. www.vastdata.com

• Gecko Robotics, a Pittsburgh-based maker of physical infrastructure inspection robots, raised $100m in Series C extension funding from backers like USIT and Founders Fund. https://axios.link/46EKTBu

• Dust Identity, a Newton, Mass.-based product authentication startup that uses invisible diamond dust, raised $40m. Castle Island Ventures led, and was joined by Amex Ventures, Airbus Ventures, Kleiner Perkins, and 8VC. https://axios.link/46LEOmS

• Replicate, a platform for open-source machine learning models, raised $40m in Series B funding. A16z led, and was joined by NVentures, Heavybit, Sequoia Capital and YC. www.replicate.com

• Leonardo.ai, an Australian AI art production startup, raised US$31m from Blackbird, Side Stage Ventures, Smash Capital, TIRTA Ventures, Gaorong Capital, and Samsung Next. https://axios.link/3sXtRkm

🌎 AgroSpheres, a Charlottesville, Va.-based sustainable crop protection startup, raised $25m in Series B funding from FMC Ventures, Lewis and Clark AgriFood, Ospraie Ag Science, Bidra Ventures, and Cavallo Ventures. www.agrospheres.com

🚑 Ketryx, a Boston-based provider of lifecycle management software for life sciences, raised $14m in Series A funding. Lightspeed Venture Partners led, and was joined by insiders MIT E14 Fund, and Ubiquity Ventures. www.ketryx.com

• Ladder, an Austin, Texas-based virtual strength training startup, raised $12m in Series A funding co-led by Tapestry VC and LivWell Ventures, per Axios Pro. https://axios.link/3R8JJse

🚑 Orchid, an SF-based reproductive tech startup focused on longevity, raised $12m from Prometheus Fund, Starbloom Capital, Refactor Capital, Pebblebed, Day One Ventures, and Conviction Capital. www.orchidhealth.com

⚡ Blue World Technologies, a Danish fuel cell developer for the maritime industry, raised €11m from Maersk Growth, the Export and Investment Fund of Denmark, and Cycle Group. www.blue.world

• Machinery Partner, a Boston-based heavy machinery procurement and financing platform, raised $11m in Series A funding from ASV, Pritzker Group, Pacific Western Bank, One Way Ventures, Euclid Group, and Techstars Ventures. www.machinerypartner.com

• Sharpen, a Concord, Mass.-based reading program focusing on early-risk assessment, raised $11m in Series A funding led by Learn Capital, per Axios Pro. https://axios.link/3tbn7iD

• Spade, a New York-based fintech fraud prevention startup, raised $10m in Series A funding. Flourish Ventures led, and was joined by a16z, Gradient Ventures, YC, Dash Fund and Everywhere Ventures. www.spade.com

🍕 Milano Vice, a Berlin-based delivery-first pizza restaurant concept, raised $9m in Series A funding. Coefficient Capital led, and was joined by True, Geschwister Oetker and Speedinvest. https://axios.link/47HWcdz

• PlantSwitch, a Sanford, N.C. maker of plant-based plastics, raised $7.7m from backers like NexPoint Capital. www.plantswitch.com

• Omniful, a Saudi supply chain and e-commerce enablement startup, raised $5.9m in seed funding. VentureSouq led, and was joined by 500 Global, DASH Ventures, Jahez Group, Seedra Ventures, Bunat Ventures, Hala Ventures, and RZM Investments. https://axios.link/3TbGgvA

• ZestMoney, an Indian BNPL startup that raised over $125m in VC funding, has shut down. Backers included Goldman Sachs, Quona Capital, Zip Co., PayU, Ribbit Capital, Accion and Regal Partners. https://axios.link/3RbNb5b

⚡ American Pacific Group completed its C$140m take-private buyout of Spark Power, a Canadian provider of electrical power and maintenance services. www.sparkpowercorp.com

• Blackford Capital acquired LTD Online Stores, a patio furniture e-commerce business and wholesale distributor. www.ltdonlinestores.com

• Fortissimo Capital is in talks to buy a majority stake in Tel Aviv-listed wireless provider Cellcom Israel for around $248m. https://axios.link/41dEa0m

• Francisco Partners completed its £175m take-private acquisition of Blancco, a British provider of secure data erasure and mobile lifecycle solutions. www.biancco.com

• Grace Hebert Curtis Architects, a Baton Rouge, La.-based portfolio company of Bernhard Capital, acquired Fort Myers, Fla.-based BSSW Architects. www.ghc-arch.com

• H.I.G. Capital acquired Mainline Information Systems, a Tallahassee, Fla.-based IT solutions provider. www.mainline.com

⚡ MBK Partners launched a tender to acquire at least a 20% stake in Seoul-listed battery storage firm Hankook & Co. https://axios.link/3RuT0Lx

• Mercer Advisors, an RIA majority owned by Oak Hill Capital and Genstar Capital, acquired Jacksonville, Fla.-based Paragon Wealth Strategies. www.merceradvisors.com

• Nextalia and NB Renaissance offered to buy Italian seed producer Verisem, which had its prior deal with Syngenta was blocked by regulators, per Reuters. https://axios.link/47GajzS

🚑 Platinum Dermatology Partners, a Dallas-based portfolio company of Sun Capital Partners, acquired Skin & Cancer Associates of Florida. www.platinumderm.com

• The Riverside Co. acquired busybusy, a St. George, Utah-based provider of time-tracking software for construction and other remote industries. www.busybusy.com

🎳 Trive Capital agreed to buy Ten Entertainment (LSE: TEG), a British bowling center operator, for £287m. https://axios.link/485nERY

• Ascotway, a sustainable modular builder, agreed to go public at a $600m enterprise value via Zalatoris II Acquisition Corp. (Nasdaq: ZLS). https://axios.link/3NdyHRg

• Blue Gold, a Canadian gold mining platform, agreed to go public via RCF Acquisition Corp. (NYSE: RCFA), a SPAC led by Sunny Shah (ex-Goldman Sachs). https://axios.link/46LAmEo

• Yum Brands (NYSE: YUM) agreed to buy 218 KFC restaurants in the U.K. and Ireland from EG Group, a portfolio company of TDR Capital. https://axios.link/47Lslke

⚡ Allete (NYSE: ELE), a Duluth, Minn.-based power utility and renewable energy developer with a $3.5b market cap, hired JPMorgan to explore a sale, per Reuters. https://axios.link/47JwDsy

• Danaher (NYSE: DHR) completed its $5.7b all-cash takeover of Abcam, a British provider of biological reagents. https://axios.link/4877NCL

🍺 Diageo (LSE: DGE) is seeking to sell its beer portfolio, save for Guinness, per Axios Pro. https://axios.link/3tdcEmR

• Fitch Group, a Hearst-owned financial information services provider, acquired syndicated loan credit information provider Bixby Research & Analytics. https://axios.link/3NezJfJ

• A Good Movie to Watch, a film recommendation site owned by Las Vegas-based Altona Studio, acquired The Spool, a publication covering film and TV. www.agoodmovietowatch.com

• Perpetual (ASX: PPT), an Australian fund manager, rejected a A$3.1b takeover offer from its largest shareholder, Washington H Soul Pattinson (ASX: SOL). https://axios.link/46LkeTt

• Avenir Growth Partners of New York is raising up to $800m for its fourth fund, per an SEC filing. https://axios.link/47MxTLA

• Canapi Ventures, a fintech-focused VC firm, raised $750m for its second set of funds. https://axios.link/3Ng5eWL

🌎 Collateral Good, a Zurich-based VC firm, is raising €100m for a sustainable fashion fund whose cornerstone backer will be Hugo Boss. https://axios.link/3t3F8Q6

• Heartcore Capital of Denmark raised €15m for its first crypto VC fund. https://axios.link/3tddoIC

🌎 Summa Equity raised a continuation fund for NG Group, a Norwegian provider of waste management and environmental services. www.norskgjenvinning.no

• Peg Sullivan joined GTCR as a managing director and head of human resources. She previously spent 25 years with Morgan Stanley. www.gtcr.com

Yesterday we noted that Fidelity has marked down the value of its Twitter/X shares by around 68% between the end of October 2022, when it helped Elon Musk buy the company, and the end of October 2023.

• Fidelity doesn't share how it calculates valuations for privately held companies, for which it may have only limited information rights, but the assumption is that it heavily incorporates public stock comps.
• In this case, however, Fidelity isn't letting those comps drive its decisions.
• Facebook shares rose more than 200% during the same time period, while Pinterest climbed 23.5%, the Nasdaq Composite was up 18%, and Snap only declined by 2.3%.

The one area where the comps are somewhat consistent is if you look at Snap from back when Musk first agreed to buy Twitter. Using his April 14 unsolicited bid as the starting point, Snap was down 69% through Oct. 31, 2023.

• Facebook, however, rose 43% during that period.