Elon Musk’s xAI incurred a $6.4 billion operating loss on $3.2 billion in revenue in 2025, according to SpaceX’s IPO filings. The losses are expected to grow, with SpaceX planning to scale Grok to “multiple trillions of parameters,” which will likely demand significant additional compute expenditure.
Musk merged xAI, which had previously bought his social media platform X (formerly Twitter), with SpaceX in February and announced plans to take the combined company public. While competitors OpenAI and Anthropic are also considering public offerings in 2026, SpaceX’s IPO could be one of the largest ever, potentially valuing the company at $1.75 trillion.
The filing offers the first public look at xAI, and thus X’s, financials. In 2024, xAI reported a $1.56 billion loss on $2.62 billion in revenue. By 2025, losses grew to $6.4 billion on $3.2 billion in revenue, widening the gap between earnings and expenses. Meanwhile, competitor and client Anthropic expects a 130% revenue increase to $10.9 billion in Q2, leading to its first operating profit.
The revenue jump from 2024 to 2025 was primarily due to “AI solutions and infrastructure revenue” totaling $465 million, including $365 million from X and Grok subscriptions and $88 million from data licensing. Advertising contributed an additional $116 million.
AI capital expenditures rose from $12.7 billion in 2025 to $7.7 billion in Q1 2026 alone, with an annualized capex run rate of about $30.8 billion, more than doubling year-over-year.
Despite the investment, user numbers remain limited. As of March 2026, SpaceX recorded 117 million monthly active users for Grok AI features out of 550 million total MAUs across Grok and X combined, indicating only one-fifth actively use Grok AI.
However, SpaceX plans to advance with Grok; the next-generation AI aims to scale to “multiple trillions of parameters,” described as a significant leap in reasoning in depth and intelligence, now documented in SEC history.
This goal will necessitate more investment. The “use of proceeds” section of the SpaceX filing mentions an “expansion of our AI compute infrastructure.” xAI’s Colossus and Colossus II data centers, operational in 122 and 91 days respectively, provide about 1 gigawatt of compute power for Grok’s training and inference. SpaceX asserts that owning the compute infrastructure enables training and iteration of frontier models at lower cost and higher speed.
SpaceX may alleviate investor concerns by conducting training and inference on orbital data centers, which Musk promises will be cheaper than terrestrial ones. This vision is not expected for several years, with the filing indicating that orbital AI compute satellites will start launching as early as 2028.
“The future of AI will be determined by control of the physical stack,” the filing states.