xAI, the artificial intelligence (AI) corporations led by Tesla Chief Executive Officer Elon Musk, posted a loss in the 2 trillion won range in the third quarter of last year, Bloomberg reported on the 8th, local time, saying the loss widened as it spent heavily on building an AI data center, recruiting talent, and developing AI for Humanoid Robot.
According to internal xAI documents reviewed by Bloomberg, xAI recorded a net loss of $1.46 billion (about 2.1 trillion won) in the third quarter of last year (July–September). The deficit widened compared with the previous quarter ($1 billion). From January to September last year, xAI's cash expenditure reached $7.8 billion (about 11.5 trillion won).
xAI, the developer of the AI chatbot "Grok," told investors on a recent conference call that it is quickly burning through externally raised funds, according to sources familiar with the matter who spoke to Bloomberg. xAI told investors that its goal is to build AI that can operate autonomously without external intervention and ultimately power Humanoid Robot such as Tesla's Optimus.
According to the sources, xAI's management is now focusing on building AI agents and related software as quickly as possible, and the related products are expected to be applied to the AI-only software company "Macrohard," mentioned by CEO Musk. After that, the ultimate plan is for it to power Optimus. Meaning "large and hard," Macrohard is a name that flips Microsoft (MS), which can be read as "small and soft." It is interpreted as a naming that reflects CEO Musk's ambition to build a software corporations that can compete with MS.
Management reportedly suggested to investors that xAI has sufficient resources to continue aggressive investment expenditure. The documents described AI's explosive growth as "escape velocity," a term borrowed from celestial mechanics that CEO Musk often uses when explaining how fast corporations he runs, including SpaceX, can grow.
As of the third quarter of last year, xAI's revenue was $1.07 billion (about 160 billion won), roughly doubling from the previous quarter.
xAI Holdings, the parent company of xAI and X (formerly Twitter), raised $20 billion (about 29 trillion won) in a recently completed funding round. Qatar Investment Authority, Valor Equity Partners, and Nvidia participated. The corporate value was assessed at about $230 billion (about 335 trillion won).
According to people familiar with the company's finances, given that xAI's monthly investment expenditure does not exceed $1 billion, the funds raised this time are expected to support the company's operations for more than a year.