Musk's $9B Neuralink classified itself as a 'small disadvantaged business'
What's the story
Elon Musk's health tech company, Neuralink, had classified itself as a "small disadvantaged business" in a federal filing with the US Small Business Administration (SBA). The designation came just before a funding round that valued the company at $9 billion. The filing was made on April 24, when Musk was heading Trump's Department of Government Efficiency (DOGE), which aimed to reduce the size of federal agencies.
Business classification
What is a 'small disadvantaged business'
The SBA defines a "small disadvantaged business" as one that is at least 51% owned and controlled by socially and economically disadvantaged individuals. This designation can provide businesses with preferential access to federal procurement opportunities. However, the Department of Justice has penalized companies for falsely claiming this status in the past. Critics argue that the timing of the filing raises questions around intent and transparency. Some allege that the designation may have been pursued to leverage funding advantages.
Investment details
Neuralink raised $650 million in June
Neuralink, which was incorporated in Nevada, raised $650 million in a funding round in early June at a $9 billion valuation. The investors included ARK Invest, Peter Thiel's Founders Fund, Sequoia Capital, and Thrive Capital. The company said the new capital would be used to expand its technology to more patients and create new devices that "deepen the connection between biological and artificial intelligence."
Diverse portfolio
Other ventures of Musk
Apart from Neuralink, Musk is also the CEO of Tesla and SpaceX. He has other businesses such as AI start-up xAI and tunneling company The Boring Company. In 2022, he bought Twitter for $44 billion, rebranded it as X. Under his leadership at DOGE, the initiative targeted government agencies that prioritized diversity, equity and inclusion (DEI).