Quick overview

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Elon Musk’s artificial intelligence startup, xAI, is rapidly incurring losses as it invests in developing software that will eventually power humanoid robots, building data centers, and hiring talent. According to the documents examined by Bloomberg, XAI reported a net loss of $1.46 billion for the September quarter, up from $1 billion in the first quarter.

 

It spent $7.8 billion in cash during the first nine months of the year. According to people familiar with the situation, xAI is rapidly utilizing the money it raised in recent funding rounds, just like other rapidly expanding AI startups.

This was stated in both its most recent earnings report and a call that xAI executives had with investors. The company informed investors that its objective is to develop self-sufficient AI, which will eventually power humanoid robots, such as Optimus, a Tesla robot designed to replace human labor.

xAI leadership, including Chief Revenue Officer Jon Shulkin, informed investors during the investor call that the company’s primary focus now is on developing AI agents and other software quickly. Until it can eventually power Optimus, those products will feed into what Musk has described as “Macrohard,” a term that refers to an AI-only software company.

The name is a play on “Microsoft.” Investors were informed by the company’s executives that xAI had the resources to keep up its aggressive spending.

The quick development of AI was described in documents as “escape velocity,” a term taken from astrodynamics that Musk frequently uses to discuss how quickly his businesses, like Space Exploration Technologies, can expand.