Elon Musk’s artificial intelligence startup, xAI, is spending around $1 billion per month as it aggressively builds out its own infrastructure and develops advanced AI models, according to a report by Bloomberg.
Per the report, which cited people with knowledge of the matter, xAI plans to raise up to $9.3 billion through a mix of debt and equity financing to support its ambitious plans.
Over half of that funding is expected to be used within the next three months, as the company races to build server farms and manufacture custom AI chips, Bloomberg reported.
xAI is also leveraging proprietary data from Musk’s social media platform, X, to train its models and reduce reliance on third-party datasets.
Despite spending at a rate that could reach $13 billion in 2025 alone, xAI is only expected to generate approximately $500 million in revenue for the year, a fraction of what competitors like OpenAI are bringing in, the report highlighted.
Investors remain confident in xAI’s prospects, with its valuation has surged, jumping from $51 billion to $80 billion in just three months, bolstered by backing from major investors including Sequoia Capital and Andreessen Horowitz.
Musk publicly rejected Bloomberg’s report. “Bloomberg is talking nonsense,” he said in a post on his social media platform X.