In brief: Elon Musk’s artificial intelligence startup, xAI, is burning through cash at an astounding rate. According to a new report, the company expects to spend at least $13 billion throughout all of 2025, equivalent to just over $1 billion every month. Musk, of course, has called the report “nonsense.”
Citing the usual anonymous people familiar with the matter, Bloomberg writes that the $500 million that xAI will earn this year looks positively tiny next to the $13 billion it plans to spend. The company is also expecting to receive a $650 million rebate from a hardware manufacturer.
The publication also claims that of the $14 billion xAI has raised since 2023, only $4 billion remained in the first quarter of 2025, and it will be almost depleted in Q2.
xAI has told investors that it is now finalizing $4.3 billion in new equity funding, and it has plans to raise another $6.4 billion of capital next year. That’s on top of the $5 billion in debt that Morgan Stanley is reportedly helping it to raise. The sources said that the corporate debt is expected to help pay for xAI’s data center development.
Elon Musk is super human.
What would take everyone else a year, only took him 19 days. pic.twitter.com/q51sM48lsu
– Tesla Owners Silicon Valley (@teslaownersSV) October 13, 2024
xAI has famously spent billions on its data centers as it competes with established industry giants like OpenAI. One of its facilities, the Memphis Supercluster, is filled with 200,000 Nvidia Hopper GPUs. The AI Colossus supercomputer is also backed up with 150MW of Tesla Megapack Batteries.
Musk previously said he plans to expand Colossus to over one million GPUs. With each one priced at tens of thousands of dollars, the cost of such an undertaking could be between $50 billion and $62.5 billion.
Musk has been uncharacteristically subdued in his response to the report. He replied to a user post on X that stated “People really have no idea what’s at stake” with “They don’t. Also, Bloomberg is talking nonsense.”
They don’t.
Also, Bloomberg is talking nonsense.
– Elon Musk (@elonmusk) June 18, 2025
The world’s richest man doesn’t usually hold back when it comes to slamming these reports. He was positively apoplectic over claims that the Tesla board was hunting for a new CEO. He also slammed reports that he was leaving his government role over a falling out with Trump – just before he had a massive falling out with Trump.
xAI’s valuation reached $80 billion in the first quarter of 2025, a considerable increase compared to the $51 billion valuation at the end of 2024. It’s helped attract investors such as Andreessen Horowitz, Sequoia Capital, and VY Capital. Some of the most positive predictions say it will finally make a profit in 2027. That would beat OpenAI’s profit timeline, which predicts it will be in the black in 2029.