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xAI's Aggressive Expansion Costs $1 Billion per Month as Musk Targets Full Infrastructure Control
ByAinvest
Wednesday, Jun 18, 2025 9:43 am ET1min read
xAI, an AI startup founded by Elon Musk, is reportedly spending $1 billion per month to build its own infrastructure and develop advanced AI models. The company plans to raise up to $9.3 billion through debt and equity financing, with over half of that funding expected within the next three months. xAI is leveraging proprietary data from Musk's social media platform X to train its models. Despite high spending, xAI's revenue is expected to be only $500 million in 2023, a fraction of competitors like OpenAI.
Elon Musk's AI startup, xAI, is reportedly burning through $1 billion per month to build its infrastructure and develop advanced AI models [1]. The company is planning to raise up to $9.3 billion through debt and equity financing, with over half of that funding expected within the next three months [1].xAI is leveraging proprietary data from Musk's social media platform X to train its models, which could reduce costs compared to rivals like OpenAI [1]. Despite high spending, xAI's revenue is expected to be only $500 million in 2023, a fraction of competitors like OpenAI, which is expected to bring in $12.7 billion this year [1].
Elon Musk has forcefully rejected Bloomberg News' claims that xAI is hemorrhaging $1 billion monthly, stating that "Bloomberg is talking nonsense" [2]. However, the company is facing significant financial demands, with costs for building advanced AI models outpacing revenues [1].
xAI is currently finalizing $4.3 billion in new equity funding, and it already has plans to raise another $6.4 billion of capital next year [1]. The company is also expecting to get a bit of help from a $650 million rebate from one of its manufacturers [1].
Despite the challenges, xAI's prospects are promising. The company aims to leverage the platform's vast data archives for model training, which could reduce costs compared to rivals like OpenAI [1]. xAI's valuation reportedly soared to $80 billion by Q1 2025, up from $51 billion in 2024 [1].
References:
[1] https://finance.yahoo.com/news/musk-xai-burns-1-billion-185314873.html
[2] https://techcrunch.com/2025/06/17/elon-musks-xai-is-reportedly-seeking-a-4-3b-equity-raise/
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