TLDR

  • In Q3 2025, Elon Musk’s xAI had a net loss of $1.46 billion, which was an increase from the $1 billion loss in Q1.
  • During the first nine months of 2025, the AI startup used up $7.8 billion in cash.
  • In Q3, the revenue almost doubled to $107 million, but the company might not reach the $500 million annual target set in June.
  • xAI raised $20 billion in its latest funding round, and the company was valued at $230 billion.
  • The company intends to use AI to power Tesla’s Optimus humanoid robots in the long run.

According to internal financial documents, Elon Musk’s artificial intelligence startup xAI reported a net loss of $1.46 billion for the quarter ending in September 2025. This loss was higher than the $1 billion loss the company reported in the first quarter of 2025.

During the first nine months of 2025, the AI company spent $7.8 billion in cash. This rapid spending shows xAI’s efforts to build data centers, hire top – notch talent, and develop AI software.

xAI’s main objective is to create self – sufficient AI that will eventually power Optimus humanoid robots. These robots are designed to take the place of human workers in various tasks.

During the same period, the company’s revenue grew. The revenue nearly doubled from the previous quarter, reaching $107 million for the three months ending on September 30, 2025.

By September, xAI reported total annual sales of over $200 million. The gross profit increased to $63 million in Q3, up from $14 million in the previous quarter.

Despite the revenue growth, xAI executives admitted that the company might miss its annual revenue target. In June, the company had set a goal of $500 million in revenue for the whole year.

Recent Funding Round

Recently, xAI completed a $20 billion equity funding round. This round included investments from Corp., Valor Equity Partners, and the Qatar Investment Authority.

The funding round valued xAI at $230 billion. Company executives informed investors that the current cash reserves can support monthly spending of less than $1 billion for at least a year.

To date, xAI has raised at least $40 billion in equity funding. The company is also raising debt financing along with its equity raises.

Expansion Plans

Chief Revenue Officer Jon Shulkin told investors in a recent call that xAI is focused on quickly building AI agents and other software. These products will contribute to what Musk calls “Macrohard,” a play on Microsoft’s name for an AI – only software company.

The company is expanding its Colossus data center in Memphis, Tennessee. xAI recently bought a third building in the area, which will increase the computing capacity to nearly 2 gigawatts of power.

xAI has partnered with Valor and Apollo Global Management through a special vehicle to purchase Nvidia chips. The company expects to finalize more deals soon to continue expanding its data center infrastructure.

By September, the company’s EBITDA loss totaled $2.4 billion. This was more than the company’s earlier projection of a $2.2 billion EBITDA loss for the whole year.

By September, xAI spent nearly $160 million on stock – based compensation. This spending reflects the intense competition for AI talent in the industry.

The company has integrated its Grok chatbot into X, the social network formerly known as Twitter. Grok is also available in Tesla vehicles.

xAI’s parent company, xAI Holdings, also owns X. SpaceX has invested in xAI, and xAI has spent hundreds of millions on Tesla Megapack batteries.

In November, Tesla shareholders voted on whether the company should invest in xAI, but the non – binding proposal did not get enough votes to pass.