Elon’s AI venture xAI is pursuing a massive $9.3 billion fundraising round as the company’s monthly spending surpasses $1 billion, according to Bloomberg sources. The startup, founded in 2023, is structuring the raise as $4.3 billion in equity funding combined with $5 billion in convertible debt.
xAI fundraising comes at a critical juncture for the company, which has already raised $14 billion since its inception, xAI raises $6B in series C funding. With approximately $4 billion remaining from previous rounds as of early Q1 2025, the company expects to exhaust virtually all existing capital by the end of Q2.
xAI’s current monthly expenditures exceed $1 billion, positioning the company to spend $13 billion throughout 2025. Sources indicate that the company anticipates burning through more than half of the incoming $9.3 billion within three months of closing the round.
The aggressive spending reflects xAI’s race to scale infrastructure and model development in one of tech’s most capital-intensive sectors. Beyond the current xAI fundraising, the company has already identified plans for an additional $6.4 billion round targeted for next year, suggesting continued heavy investment requirements.
Following its merger with X (formerly Twitter), xAI achieved a reported valuation of $113 billion, up from $80 billion prior to the combination. Valuation increase occurred despite the company’s modest revenue projections of $500 million for 2025.
xAI expects revenue to grow to over $2 billion by 2026, with profitability targeted for 2027. Timeline contrasts with competitors like OpenAI, which projects $12.7 billion in revenue this year but doesn’t expect cash-flow positivity until 2029.
xAI’s integration with X provides access to large-scale training data without additional costs, creating a competitive advantage over rivals who must purchase or license data sources. Relationship represents a key differentiator in the company’s path to profitability.
Bloomberg notes that Musk’s personal wealth and track record of investing in high-risk ventures serves as xAI’s primary strategic asset. Entrepreneur has consistently demonstrated willingness to deploy his fortune into ambitious projects, describing xAI as exactly the type of “high-stakes bet” he prefers.
With infrastructure scaling, model development, and revenue generation all requiring simultaneous execution, xAI faces enormous pressure to deliver results that justify its extraordinary capital requirements – making this fundraising round truly ex-AI-stential for the company’s future.
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