Elon Musk’s AI startup, xAI, is racking up major losses, reporting a $1.46 billion net deficit for the September quarter, an increase from $1 billion in the previous quarter, according to internal reports by Bloomberg. The company is rapidly depleting its funds as it invests heavily in building data centers, hiring talent, and developing software for its upcoming humanoid robots.
According to financial documents reviewed by Bloomberg and shared with investors, XAI's revenue almost doubled quarter-over-quarter, reaching $107 million for the three-month period ending on September 30, 2025.
In its latest earnings call, xAI disclosed that it spent $7.8 billion in cash during the first nine months of the year. Like other rapidly growing AI startups, xAI is quickly depleting the funds raised in its recent funding rounds, according to the company’s latest earnings report and discussions with investors.
The company informed investors that its objective is to develop AI that is autonomous and will ultimately drive humanoid robots such as Optimus, Tesla Inc.'s robot designed to substitute human labor.
On the investor call, xAI leadership, including Chief Revenue Officer Jon Shulkin, emphasized that the company's core focus is rapidly developing AI agents and software. These products will contribute to "Macrohard," a term Musk has coined for an AI-only software company, a play on "Microsoft," with plans to power Optimus. Executives assured investors that xAI has the resources to continue aggressive spending.
In its latest investor call, xAI introduced new leaders, including CFO Anthony Armstrong and Shulkin, a partner at Valor Equity. Despite strong revenue growth, xAI may miss its $500 million annual target, reporting over $200 million in sales through September. The company posted a gross profit of $63 million for Q3, up from $14 million, but also faced a $2.4 billion ebitda loss. xAI has raised $40 billion in equity, including a recent $20 billion round, and paid nearly $160 million in stock-based compensation.