Elon Musk’s AI startup is growing, but at a price that’s hard to ignore. xAI nearly doubled revenue to $107 million in the third quarter, yet its losses ballooned even faster, highlighting just how expensive its ambitions have become.
According to Bloomberg, xAI posted a net loss of $1.46 billion in Q3, up from $1 billion in the first quarter and more than 13 times its quarterly revenue.
A Startup Burning Big-Tech Money
Despite revenue growth, xAI is still spending like a hyperscaler. The company, valued north of $230 billion, is burning close to $1 billion per month as it pours cash into data center construction and advanced AI development.
The long-term goal is what xAI describes as “self-sufficient” AI, systems capable of reasoning and operating autonomously, with a future role in powering robotics platforms like Tesla’s $TSLA ( ▲ 2.11% ) Optimus. For now, though, the financial profile looks far closer to a capital-hungry startup than a mature tech giant.
Tesla Ties, but No Formal Green Light
While the two companies are closely linked in vision, the relationship remains unofficial in structure. Tesla shareholders recently voted down a proposal that would have formally invested Tesla capital into xAI, leaving the extent of future cooperation unresolved.
That said, the financial overlap is already significant. In 2024, xAI spent nearly $200 million, largely on Tesla Megapack batteries, a figure that appears to have climbed even higher in 2025 as compute and power needs surged.
Capital Access Is the Real Question
xAI’s spending trajectory makes one thing clear: sustained access to outside capital is essential. With losses accelerating faster than revenue and infrastructure costs continuing to scale, the company’s ability to fund its ambitions will matter more than near-term topline growth.
For now, xAI is betting that massive upfront losses will eventually translate into dominance across AI and robotics. The question investors are circling is whether patience, and capital, will hold long enough to get there.