Elon Musk's artificial intelligence startup xAI is trying to raise $9.3 billion in debt and equity, but even before the money comes in, the company plans to spend more than half of it in the next three months, according to terms of the deal shared with investors.
The speed at which the company is raising and burning capital is a stark illustration of the AI industry's unprecedented funding needs and the relatively meager revenue it has generated so far, at least for xAI.
Looking at the company’s leveraged cash flow, xAI, which develops the AI chatbot Grok, is expected to consume about $13 billion during 2025, or more than $1 billion per month, according to people familiar with the matter who asked not to be identified discussing private information. That means the company's frequent fundraising activity can barely keep up with spending, these people added.
A company spokesman declined to comment.