Elon Musk, the world’s second-richest person, has seen his net worth tumble by nearly $90 billion in early 2025 due to the underperformance of Tesla’s stock. The electric vehicle giant’s shares have declined approximately 13.4% year-to-date and have fallen 27% since their mid-December peak, which had propelled Musk’s net worth to a staggering $486.4 billion, according to the Bloomberg Billionaires Index.
Musk derives around 60% of his wealth from Tesla (TSLA) shares and options, making his fortune highly sensitive to the company’s stock fluctuations. The recent decline has raised concerns among investors about Tesla’s market position, competition from Chinese EV manufacturers, and broader economic headwinds.
Tesla Faces Competitive and Market Challenges
Tesla’s latest stock slump was exacerbated on Tuesday when BYD, its major Chinese rival, announced a cutting-edge “God’s Eye” driver-assistance feature that will be offered for free in all of its vehicles. The announcement sent BYD’s stock surging while Tesla’s dropped by approximately 6%. The development highlights the growing competition Tesla faces in China, the world’s largest EV market, where BYD recently surpassed Tesla in quarterly global sales.
Last week, Tesla shares plummeted 11%, marking their worst performance since October 2024. The drop followed disappointing global sales figures that failed to meet Wall Street expectations. In January, Tesla reported weaker-than-expected fourth-quarter revenue and earnings, heightening investor anxiety about the company’s growth trajectory.
Despite these challenges, Musk’s broader portfolio of companies remains strong. His space exploration company, SpaceX, reached a $350 billion valuation, making it the world’s most valuable privately held startup. Meanwhile, his artificial intelligence venture, xAI, secured $6 billion in funding, bringing its valuation to $50 billion.
Musk’s Bid for OpenAI Sparks Industry Debate
Amid the turmoil surrounding Tesla, Musk has shifted focus to the artificial intelligence sector. His attorney, Marc Toberoff, reportedly submitted a bid on Monday to OpenAI’s board of directors to acquire all of the company’s assets. According to The Wall Street Journal, a group of investors led by Musk has offered $97.4 billion to take control of OpenAI’s nonprofit parent entity.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement shared with The Wall Street Journal. “We will make sure that happens.”
OpenAI’s CEO, Sam Altman, quickly dismissed Musk’s offer, stating that OpenAI is not for sale. The move underscores the ongoing debate about the direction of artificial intelligence development, with Musk advocating for transparency and public access to AI advancements while OpenAI continues to operate under a more closed model.
Investor Concerns and Market Outlook
Musk’s recent financial downturn highlights the volatility of his wealth, which is primarily tied to Tesla’s stock performance. Analysts have raised concerns about Tesla’s ability to maintain its dominance in the EV sector as competition intensifies. Additionally, global economic uncertainty, high interest rates, and shifting consumer demand could further impact Tesla’s valuation.
Despite the challenges, Musk’s diversified portfolio—including SpaceX, xAI, and other ventures—provides him with multiple avenues for future growth. However, Tesla remains the core pillar of his empire, and its performance will continue to play a crucial role in shaping his overall net worth.
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