Elon Musk founded artificial intelligence startup xAI reported a widening net loss of $1.46 billion in the September quarter, reflecting the rising cost of building large-scale AI systems, according to a report published by Bloomberg News.

The loss marks a sharp increase from the $1 billion net loss recorded in the June quarter, underscoring the capital-intensive nature of developing advanced artificial intelligence models and infrastructure.

Despite the widening losses, xAI’s revenue showed strong momentum. Bloomberg reported that the company’s quarterly revenue nearly doubled to $107 million for the three months ended September 30, 2025, based on internal financial documents reviewed by the publication.

Heavy cash burn highlights scale of spending

The Bloomberg report also highlighted large cash outflows at the startup founded and led by Elon Musk. It is reported that in the first nine months of the year, AI startup, xAI, used a massive $7.8 billion in cash, with its investments covering computing infrastructure and personnel, among others.

Such spending levels place xAI among the most capital-intensive players in the global artificial intelligence race, where companies are rapidly expanding data centres and computing capacity to train increasingly complex models.

xAI response and verification status

When contacted by Reuters for comment on the Bloomberg report, xAI responded with a brief statement saying, “Legacy Media Lies.” Reuters noted that it was not immediately able to independently verify the figures reported by Bloomberg.

Founded by Elon Musk as a rival to OpenAI and other leading AI labs, xAI has been positioning itself as a major contender in the fast-evolving generative AI landscape. However, the latest financial details highlight the financial strain that even well-funded AI startups face as competition intensifies and infrastructure costs continue to rise.

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