Elon Musk’s startup xAI spends $1 billion a month, as the cost of creating advanced artificial intelligence models far outstrips its income. The company also attracts loans.
To cover expenses in anticipation of future revenues, the company is trying to get $9.3 billion in loans, according to sources Bloomberg. But even before the money arrives in the account, it plans to spend more than half of it over the next three months. In total, xAI plans to spend about $13 billion this year alone, and its revenues are barely keeping pace with its expenses.
The company is currently finalizing a $4.3 billion equity fundraising and already plans to raise another $6.4 billion next year. All this is in addition to the $5 billion that Morgan Stanley is helping it raise. The corporate loan is expected to help pay for the development of the xAI data center.
The shortage of funds is partly due to the huge costs faced by all artificial intelligence companies in the stages of purchasing equipment and training advanced models. The Carlyle Group predicts that companies will spend $1.8 trillion by 2030 to meet the demand for infrastructure. xAI is trying to keep up with competitors like OpenAI and Anthropic with much smaller capacities.
Earlier, Bloomberg reported that OpenAI expects revenue of $12.7 billion this year. xAI’s revenue, which was recently disclosed to investors, will be only $500 million this year, with a planned growth to over $2 billion next year. But its owner, Elon Musk, is able to offset the costs with his own funds, as well as known for attracting huge loans. His SpaceX has been suffering losses for yearsin pursuit of its long-term goal of interplanetary exploration.
A company spokesperson declined to comment on the company’s revenue and expenses. However, Musk said: «Bloomberg is talking nonsense» in response to a post on in X that linked to the article.
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