xAI burned $6.4 billion in 2025 and is only spending faster

The News

SpaceX's long-awaited IPO filing has accidentally pulled back the curtain on xAI, Elon Musk's artificial intelligence venture. The document shows xAI posted a $6.4 billion operating loss in 2025 against $3.2 billion in revenue, a gap that nearly quadrupled from the $1.56 billion loss it recorded a year earlier on $2.62 billion in sales.

The revenue mix is heavily skewed towards subscriptions and legacy social media. Of the $3.2 billion total, advertising contributed $116 million while the AI segment brought in $465 million, split between $365 million from X and Grok premium tiers and $88 million from selling training data. The remainder came from X's wider ad business.

Spending is moving in the opposite direction. xAI's capital expenditure on AI infrastructure reached $12.7 billion in 2025, more than double the prior year. The first quarter of 2026 alone consumed $7.7 billion in capex, putting the company on an annualised run rate of roughly $30.8 billion.

The filing also confirms scale milestones. Colossus and Colossus II, the company's twin Memphis data centres, were stood up in 122 days and 91 days respectively and together house about one gigawatt of compute. Musk's stated plan is to push the next generation of Grok to multiple trillions of parameters, with an extension into orbital satellite clusters targeted for 2028 or later.

Why It Matters

The disclosure drags a number the AI industry has been quietly speculating about for two years into the open. OpenAI's own losses, last reliably reported at roughly $5 billion in 2024, set the benchmark for what frontier model work costs at this scale. xAI has now overshot that figure, and the curve is steepening.

The 117 million monthly active users on Grok features, out of a combined X and Grok ecosystem of 550 million, is respectable but cuts both ways. It shows xAI can distribute on top of an existing social graph in ways OpenAI and Anthropic cannot. It also shows that subscription monetisation is nowhere near covering compute bills: Grok's $365 million in user-paid revenue is less than a fortnight of the company's current capex.

The last time a private AI lab spent at this pace without a clear path to positive gross margins was OpenAI in 2023, and Microsoft effectively underwrote that programme. xAI's underwriter, the filing suggests, is increasingly SpaceX itself, which has extended billions in shareholder support that prospective IPO investors will inherit by proxy.

Indian Angle

For the Indian AI ecosystem, the xAI numbers are a useful reality check. Krutrim, Bhavish Aggarwal's frontier-model venture, was last valued at around $1 billion and has raised in the low hundreds of millions. Sarvam AI, the IndiaAI mission's flagship full-stack player, closed a $41 million Series A last year and was awarded a slice of the government's subsidised GPU allocation. The gap between what India's most ambitious model labs can spend in a year and what xAI now burns in a single quarter is roughly two orders of magnitude.

That changes the strategic calculus for MeitY's IndiaAI Mission, which has been finalising compute subsidies and model grants through 2026. A sovereign frontier model that competes head-on with Grok or GPT on raw capability looks increasingly unrealistic at sub-billion-dollar budgets. Indian labs may need to recalibrate towards smaller, domain-specific models where Indic language coverage and curated data matter more than raw parameter counts.

There is also a consumer angle. Grok is bundled into X Premium, which costs about Rs 702 a month in India, far below ChatGPT Plus's dollar-pegged Rs 1,999 tier. With X's Indian user base growing again post the 2024 election cycle, xAI's burn is effectively subsidising one of the cheapest paths to a frontier model that Indian users currently have access to.

FAQ

How does xAI's loss compare to other AI labs?

xAI's $6.4 billion 2025 operating loss sits above OpenAI's last publicly reported figure of roughly $5 billion in 2024 and well above Anthropic, which is believed to be burning in the low single-digit billions a year. The pace puts xAI on track to be the most cash-intensive AI start-up of the current cycle.

What does this mean for SpaceX shareholders?

SpaceX's exposure to xAI is material enough that prospective IPO investors are effectively buying into both businesses. The filing discloses extended financial support to xAI that will likely receive close scrutiny during the SEC review process.

Is Grok available in India?

Grok is accessible to all X Premium subscribers in India and the standalone Grok app is live on iOS and Android. xAI has indicated that international monetisation is a priority for the next twelve months.

Where can I read the original filing coverage?

TechCrunch's full report, which first surfaced these numbers from the S-1 disclosure, is linked in the source attribution below.

This story was reported by TechCrunch. Read the full original coverage at TechCrunch.