Musk’s xAI Burns Almost $8 Billion

Elon Musk’s artificial intelligence startup xAI is burning cash quickly, with losses mounting as it spends heavily to build data centers, recruit talent, and develop software that will eventually power humanoid robots, according to internal documents. Carmen Arroyo reported for Bloomberg News.

Executives signaled that xAI has the resources to continue spending aggressively. (Photo: Charlie Fong, Wikimedia)

xAI reported a net loss of $1.46 billion for the September quarter, up from $1 billion in the first quarter, according to documents reviewed by Bloomberg.

In the first nine months of the year, the company spent $7.8 billion in cash.

Like other fast-growing AI startups, xAI is rapidly using the funds it raised in recent funding rounds, according to its most recent earnings report and an investor call described by people familiar with the matter.

The company told investors its goal is to build AI that is self-sufficient and will eventually power humanoid robots like Optimus—Tesla Inc.’s robot designed to replace human labor.

On the investor call, xAI leadership, including Chief Revenue Officer Jon Shulkin, said the firm’s core focus is rapidly building AI agents and other software, according to sources who requested anonymity due to the private nature of the discussions.

These products will feed into what Musk has called “Macrohard”—a term referring to an AI-only software company and a play on “Microsoft”—until they can eventually power Optimus.

Executives signaled that xAI has the resources to continue spending aggressively.

Internal documents described the rapid growth of AI as achieving “escape velocity,” a term borrowed from astrodynamics and frequently used by Musk to describe the pace at which his companies grow.