XAI losses are expanding alongside investments, Musk: Ultimately to support the operation of humanoid robot Optimus

According to internal documents reviewed by Bloomberg, Musk’s xAI further expanded its losses in Q3 2025. As data center construction, AI talent recruitment, and software development accelerate across the board, xAI is rapidly depleting the company’s cash reserves. However, company executives still emphasized during investor meetings that the long-term goal of xAI is to develop an AI system capable of “self-operation,” which will become the core brain of the humanoid robot Optimus in the future.

Losses Continue to Widen, Cash Outflows Accelerate

Internal financial documents show that in Q3 2025 ( as of September ), xAI posted a net loss of $1.46 billion, up from $1 billion in Q1. Cumulative cash expenditure for the first nine months has reached $7.8 billion, reflecting ongoing increased investment in data center construction, AI hardware and software development, and high-level talent recruitment, with a clear acceleration in cash burn.

Start with Software Systems, Ultimately Moving Toward Robots

According to informed sources, senior executives at xAI recently explained during an investor conference call that the current core mission is to accelerate the development of AI agents and related software products.

These results will first be integrated into Macrohard, a company under Musk that focuses solely on AI software, whose Chinese name is “巨硬” (MegaHard), seemingly a subtle jab at Microsoft’s (Microsoft). The long-term goal is to enable this AI system to directly drive the humanoid robot Optimus, used to replace some human labor.

Emphasizing “Escape Velocity,” Funding Still Supports Expansion

In the documents, xAI describes the rapid growth of the AI industry as “Escape Velocity” (Escape Velocity), a term Musk has also frequently used to describe the expansion pace of his companies.

The xAI management team told investors that the company currently has sufficient resources to sustain high-intensity investments to meet industry competition and technological advancement needs.

Revenue Doubled, Profit Still Not Turned Positive

In terms of revenue performance, xAI achieved $107 million in Q3 2025, nearly doubling quarter-over-quarter, indicating ongoing progress in commercialization. However, compared to the $500 million annual revenue target set at the beginning of 2025, as of September 2025, cumulative revenue is only slightly above $200 million, and whether the target will be met remains to be confirmed by the end of 2026.

Gross profit for Q3 2025 increased to $63 million, but EBITDA losses for the first nine months still reached $2.4 billion, higher than the original estimate of $2.2 billion for the full year.

Intertwined Corporate Resources, Separate Investment Relationships

Although Musk’s companies are legally independent, their operations are highly intertwined.

xAI’s chatbot Grok has been fully integrated into X and can be used in Tesla vehicles; SpaceX has invested in xAI, and xAI has also invested hundreds of millions of dollars in procuring Megapack energy storage systems from Tesla. However, Tesla itself is not currently an investor in xAI.

High Valuation to Fund Expansion, Computing Power Investment as Key Variable

To support its high cash burn rate, xAI and its parent company X, through xAI Holdings, continue fundraising. The company recently completed a $20 billion equity raise, with investors including NVIDIA, Valor Equity Partners, and Qatar Investment Authority, bringing the overall valuation to $230 billion.

Sources indicate that xAI’s monthly investment expenditure still approaches $1 billion, but the funds are expected to sustain operations for at least over a year. Meanwhile, the company continues expanding the Colossus data center in Memphis, Tennessee. Musk stated at the end of last year that the total computing power of the site will approach 2GW in the future.

Currently, xAI is accelerating both capital expenditure and computing power expansion, choosing to raise funds at a high valuation to supplement cash flow and ensure operational flexibility. In the short term, this can support over a year of high-intensity investment. However, the company’s operations remain focused on scale and technological advancement, with profitability still not achieved. Future development will depend on the progress of converting computing power investments into tangible revenue.

(Elon Musk’s xAI Spends 20 Billion Dollars! Not Only Selling Shares, but Also Using NVIDIA GPUs as Collateral)

This article on xAI’s losses and investment expansion, with Musk stating: “Ultimately, to support the operation of humanoid robot Optimus,” first appeared on Chain News ABMedia.