Elon Musk responds to report that xAI is burning through $1 billion a month

[midian182]

In brief: Elon Musk's artificial intelligence startup, xAI, is burning through cash at an astounding rate. According to a new report, the company expects to spend at least $13 billion throughout all of 2025, equivalent to just over $1 billion every month. Musk, of course, has called the report "nonsense."

Citing the usual anonymous people familiar with the matter, Bloomberg writes that the $500 million that xAI will earn this year looks positively tiny next to the $13 billion it plans to spend. The company is also expecting to receive a $650 million rebate from a hardware manufacturer.

The publication also claims that of the $14 billion xAI has raised since 2023, only $4 billion remained in the first quarter of 2025, and it will be almost depleted in Q2.

xAI has told investors that it is now finalizing $4.3 billion in new equity funding, and it has plans to raise another $6.4 billion of capital next year. That's on top of the $5 billion in debt that Morgan Stanley is reportedly helping it to raise. The sources said that the corporate debt is expected to help pay for xAI's data center development.

Elon Musk is super human.

What would take everyone else a year, only took him 19 days. pic.twitter.com/q51sM48lsu

– Tesla Owners Silicon Valley (@teslaownersSV) October 13, 2024

xAI has famously spent billions on its data centers as it competes with established industry giants like OpenAI. One of its facilities, the Memphis Supercluster, is filled with 200,000 Nvidia Hopper GPUs. The AI Colossus supercomputer is also backed up with 150MW of Tesla Megapack Batteries.

Musk previously said he plans to expand Colossus to over one million GPUs. With each one priced at tens of thousands of dollars, the cost of such an undertaking could be between $50 billion and $62.5 billion.

Musk has been uncharacteristically subdued in his response to the report. He replied to a user post on X that stated "People really have no idea what's at stake" with "They don't. Also, Bloomberg is talking nonsense."

They don't.

Also, Bloomberg is talking nonsense.

– Elon Musk (@elonmusk) June 18, 2025

The world's richest man doesn't usually hold back when it comes to slamming these reports. He was positively apoplectic over claims that the Tesla board was hunting for a new CEO. He also slammed reports that he was leaving his government role over a falling out with Trump – just before he had a massive falling out with Trump.

xAI's valuation reached $80 billion in the first quarter of 2025, a considerable increase compared to the $51 billion valuation at the end of 2024. It's helped attract investors such as Andreessen Horowitz, Sequoia Capital, and VY Capital. Some of the most positive predictions say it will finally make a profit in 2027. That would beat OpenAI's profit timeline, which predicts it will be in the black in 2029.

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Elon Musk responds to report that xAI is burning through $1 billion a month

 

[PXAbstraction]

It's almost like AI is a business in search of a model and has no idea how to be profitable.

 

[opckieran]

Elon has had many doubters and naysayers. And yet he’s still the richest man in the world. Suffice it to say he knows what he’s doing…

 

[WhiteLeaff]

He's playing with other people's money; apart from hardware companies, these big players haven't yet seen a feasible return on the huge amount they've invested.

 

[airbornex]

So let me get this straight. xAI is spending 13 billion a year, only making half a billion, and still somehow getting a higher valuation every quarter. We really are living in the golden age of PowerPoint economics.

Only Elon could drop billions on a GPU farm, call it Colossus, and then casually tweet that everything is fine while the cash burn rate looks like a rocket launch countdown.

 

[Axeia]

Elon has had many doubters and naysayers. And ye Suffice it to say he knows what he’s doing…

Imo he's had some initial success with PayPal. Struck good with a high risk approach with Tesla and SpaceX by over promising and in case of Tesla under delivering but getting away with it. That made his status so large it started dividing people. Those that see him as a genius, those that hate him for his success... Although I think that's mostly in the US where rich people are celebrated more than elsewhere.

Imo he's just winning to over promise and take more risks than most. Not everything he touches turns into gold.
Hyperloop is about the least efficient form of transport. It went from here is the next generation of transport to replace passenger trains, metro and even planes to some degree to: Here's some Tesla's in an underground tunnel.
xAI still very much seems to be a gamble, the brain chip thing looks like it'll be quite successful. The boring company is afaik just a company, not revolutionary just doing its thing.

 

[wiyosaya]

Maybe fElon has learned to hold his tongue.

 

[wiyosaya]

Suffice it to say he knows what he’s doing…

Given that fElon has built his success on other people's IP - Tesla - he bough it from the people who founded Tesla. SpaceX - he has royalty free access to ALL of NASA's IP.

Hyperloop was in the TV show Babylon 5, specifically, on all the "Mars" episodes.

 

[opckieran]

Imo he's had some initial success with PayPal. Struck good with a high risk approach with Tesla and SpaceX by over promising and in case of Tesla under delivering but getting away with it. That made his status so large it started dividing people. Those that see him as a genius, those that hate him for his success... Although I think that's mostly in the US where rich people are celebrated more than elsewhere.

Imo he's just winning to over promise and take more risks than most. Not everything he touches turns into gold.
Hyperloop is about the least efficient form of transport. It went from here is the next generation of transport to replace passenger trains, metro and even planes to some degree to: Here's some Tesla's in an underground tunnel.
xAI still very much seems to be a gamble, the brain chip thing looks like it'll be quite successful. The boring company is afaik just a company, not revolutionary just doing its thing.

Over-promising and under-delivering doesn’t really matter when even your under-delivery is better than your best competition. Sure it’s easy to cherry-pick things like the CyberTruck, and if this was a critique of that vehicle that would be perfectly fine. But nobody else on EARTH has managed to *successfully* privatize infrastructure on the massive scale as Tesla has. The reason Tesla is touted as being larger than even VW or Toyota is because unlike Tesla, neither has multiple national charging grids around the world. Tesla isn’t just an EV. They’re also a charging infrastructure, energy storage manufacturer, autonomous driver, and a data-analysis firm. (Ever wonder why Elon allows every automaker to use the Tesla standard plug for free?) Musk has always seen the bigger picture in this regard. Every major company that he controls today has transformed Infrastructure, Energy (including Renewables and Storage), Transportation, and/or Big Data on a global scale, and the fact is no other single person even comes close to that on the same scale.

 

[wiyosaya]

But nobody else on EARTH has managed to *successfully* privatize infrastructure on the massive scale as Tesla has. The reason Tesla is touted as being larger than even VW or Toyota is because unlike Tesla, neither has multiple national charging grids around the world. Tesla isn’t just an EV. They’re also a charging infrastructure, energy storage manufacturer, autonomous driver, and a data-analysis firm.

Fine and dandy to believe that, but the truth is that every Plug-in Toyota or EV comes with a level 1 charger and anyone who owns one can plug into a standard 120V outlet in the US or a standard outlet elsewhere. Why pay for the infrastructure when all your customers have it in their own homes? That may not get you long distance travel, and that's OK.Most PHEVs are not meant to go long distances as an EV.

I'll propose that at least part of the reason Tesla has under-delivered is because they have spent so much money elsewhere.

And many people probably don't realize this, but all current Toyota models come with the equivalent of the Tesla "autopilot."

Lastly, the recent blow back against Tesla is hurting the company even more.

fElon likes to brag, but, IMO, his big mouth constantly gets him into trouble.

Money =/= brains.

 

[opckieran]

Fine and dandy to believe that, but the truth is that every Plug-in Toyota or EV comes with a level 1 charger and anyone who owns one can plug into a standard 120V outlet in the US or a standard outlet elsewhere. Why pay for the infrastructure when all your customers have it in their own homes? That may not get you long distance travel, and that's OK.Most PHEVs are not meant to go long distances as an EV.

I'll propose that at least part of the reason Tesla has under-delivered is because they have spent so much money elsewhere.

And many people probably don't realize this, but all current Toyota models come with the equivalent of the Tesla "autopilot."

Lastly, the recent blow back against Tesla is hurting the company even more.

fElon likes to brag, but, IMO, his big mouth constantly gets him into trouble.

Money =/= brains.

Long distance travel was, and still is, one of the biggest concerns behind EV adoption. Elon pioneered the infrastructure that made that possible in the first place! If you really want to spend 8-24 hours charging your EV for 300 miles of driving on a 120V plug then be my guest lol. You also still have to pay your electricity anyways, and not everybody even has the ability to recharge at home, especially those living in multi-family complexes or unsafe neighborhoods.


And no, Toyota does NOT have anything remotely equivalent to AutoPilot. They’ve got driver assistance features sure, but you aren’t putting an address in your ‘yota and letting it drive you there, even WITH a comma 3!

Companies have their ups and downs. Even when he temporarily lost $140B, Elon was still the richest man on earth.

Money has nothing to do with brains. Money is what happens when you think big and execute successfully on your vision. That’s why Elon is rich. He didn’t spend years of his life insulting successful people.

 

[yRaz]

Making AI chips IS NOT a sustainable business model for nVidia, I can't wait to watch this whole thing fall apart