Elon Musk’s xAI reports $1.46 billion loss as startup rapidly expands operations — what we know

Billionaire Elon Musk’s xAI reported a net loss of $1.46 billion in the September quarter, compared to $1 billion in the previous quarter. Bloomberg reported, citing internal documents from the artificial intelligence startup.

Losses are mounting and rapidly burning through cash as the company spends money building data centers, hiring talent and developing software that will eventually power humanoid robots, according to internal documents.

xAI spending reaches $7.8 billion in 9 months

It spent $7.8 billion in cash in the first nine months of the year. Like other fast-growing AI startups, xAI is quickly using the money it raised in recent funding rounds, according to people familiar with the matter, in its latest earnings report and in a call xAI executives had with investors.

The company told investors that its goal is to create artificial intelligence that will be self-sufficient and eventually power humanoid robots like Optimus, Tesla Inc.’s robot created to replace human labor.

On the investor call, xAI leadership, including Chief Revenue Officer Jon Shulkin, told investors that xAI’s primary focus is now on quickly building AI agents and other software, said the people, who asked not to be identified discussing private conversations.

These products will fuel what’s called “Macrohard” (a term meaning a software company based solely on artificial intelligence, a play on Microsoft’s “Microsoft”) until it eventually powers Optimus.

The firm’s executives have signaled to investors that xAI has the resources to continue aggressive spending. The documents referred to the rapid growth of AI as “escape velocity”; The term was borrowed from astrodynamics and was often used by Musk to talk about how quickly his companies, including Space Exploration Technologies, could grow.

xAI revenue doubled to $107 million in September quarter

XAI revenue nearly doubled from the previous quarter to $107 million in the three months ending Sept. 30, 2025, according to financial documents shared with investors and reviewed by Bloomberg.

A representative for XAI declined to comment.

Elon Musk’s work is intertwined

While Musk runs many separate businesses and projects, he often intertwines their goals and resources.

• xAI’s chatbot Grok is fully integrated into the social network X, formerly known as Twitter, and is also available in Tesla vehicles.
• Musk’s rocket company, SpaceX, has already invested in xAI, which has spent hundreds of millions of dollars on Tesla Megapack batteries.
• Although Musk has talked about the potential benefits of officially merging xAI and Tesla, the automaker is not currently an xAI investor. Tesla shareholders voted in November on whether the company should invest in xAI — an idea that Musk also supports — but the non-binding proposal did not receive enough votes to pass. At the time, General Counsel Brandon Ehrhart said Tesla’s board was evaluating next steps.

What we know, from raisin funds to future plans

The xAI meeting with investors offered the company a chance to hear from newly appointed executives. Anthony Armstrong, a former Morgan Stanley banker, joined xAI and

Armstrong and Shulkin did not immediately respond to requests for comment. xAI’s previous CFO, Mike Liberatore, resigned from the firm last fall after just three months.

Following the investor call, xAI executives were optimistic about the firm’s results, emphasizing revenue growth. Still, he may not be able to reach his annual goal. In June, the company told investors it hoped to generate $500 million in revenue this year. By September, xAI reported sales of over $200 million.

But the documents show that the company’s gross profit increased, with xAI’s gross profit in the third quarter rising to $63 million from $14 million in the previous quarter. Despite this, xAI’s losses continue to increase. EBITDA (earnings before interest, taxes, depreciation and amortization) was negative. The company reported an ebitda loss of $2.4 billion through September; This shows that their earnings have not yet covered their expenses.

This isn’t uncommon for startups, which often need a lot of money to grow and take time to turn a profit. Still, xAI’s losses were greater than initially expected; The firm had previously forecast a $2.2 billion ebitda loss for the full year, Bloomberg previously reported.

XAI has yet to release year-end results to investors, which executives say are positive. XAI has raised at least $40 billion in equity capital to date, including the latest $20 billion round the firm announced earlier this month.

The company paid out almost $160 million in stock-based compensation through September; This is a reflection of the escalation of the AI ​​talent wars.

(With input from Bloomberg)