Elon Musk’s xAI Expects to Spend $13 Billion in 2025

Elon Musk’s artificial intelligence (AI) startup, xAI, reportedly expects to spend $13 billion this year while bringing in revenues of $500 million.

The company shared this data with investors while working to raise $9.3 billion in debt and equity, Bloomberg reported Tuesday (June 17), citing unnamed sources.

XAI did not immediately reply to PYMNTS’ request for comment.

The rate at which the company is raising money and spending it is common across the AI industry, due to the financial demands of the technology, which requires server farms and specialized chips, according to the report.

XAI has been keeping pace with these demands by raising funds, the report said. It also has the support of Musk, the world’s richest man, who has a history of investing in companies long before they start making money.

The company also has the potential advantages of access to chips through Musk’s social media company, X, which stockpiled them, and the possibility of training its AI models on X’s archives now that the two companies have merged, per the report.

XAI has projected that it will be profitable by 2027, and it told potential investors that its valuation rose from $51 billion at the end of 2024 to $80 billion at the end of the first quarter, according to the report.

It was reported in May that xAI’s generative AI tool, Grok, saw fast growth starting in late February, thanks to the release of Grok 3, and had around 8 million daily average visits.

On May 6, xAI and Palantir announced that they had teamed up to explore how financial services firms can employ AI.

The partnership’s current offerings include an “agentic workforce” that the companies described as “modular AI agents tailored to specific business processes,” with a “deep focus on orchestration across and between functions” to deliver things like revenue generation and cost reduction.

When xAI acquired X in March, Musk said the companies’ futures are intertwined.

“Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”