$6.4 billion lost. $3.2 billion earned. Elon Musk’s xAI lost two dollars for every dollar it brought in last year, and nobody was ever supposed to know.

xAI is private, and Musk has never been eager to discuss his companies’ finances. But in February, he merged xAI — which had already absorbed the social media platform X — with SpaceX. And SpaceX, which filed a nearly 400-page S-1 with the SEC on May 20 ahead of a June public offering, is required to disclose everything.

The result is the first public window into the economics of Musk’s AI venture — and an unintentional case study in why mandatory financial disclosure exists.

The Numbers, Unburied

xAI’s losses didn’t just grow. They quadrupled. In 2024, the company lost $1.56 billion on $2.62 billion in revenue, according to the filing. By 2025, revenue had ticked up to $3.2 billion — but losses ballooned to $6.4 billion. The gap between what xAI earns and what it spends is widening, not closing.

The revenue breakdown tells its own story. According to TechCrunch’s analysis of the filing, the revenue jump from 2024 to 2025 came largely from $465 million in AI solutions and infrastructure revenue — including $365 million in X and Grok subscriptions and $88 million in data licensing — plus an additional $116 million from advertising. xAI isn’t just building models. It’s in the business of renting out processing power.

SpaceX as a whole reported $18.67 billion in revenue for 2025, up from $14.02 billion in 2024, according to Ars Technica. But after turning a small profit in 2024, the combined company lost $4.94 billion last year, largely driven by AI development spending.

A Down Payment on Bigger Losses

The burn rate is accelerating. xAI’s capital expenditure reached $12.7 billion for all of 2025. In the first quarter of 2026 alone, it hit $7.7 billion — an annualized run rate of roughly $30.8 billion, more than double the prior year.

The money is building compute infrastructure. xAI’s Colossus and Colossus II data centers, constructed in 122 days and 91 days respectively, now deliver about 1 gigawatt of combined processing power for training and running AI models. SpaceX frames vertical integration as a competitive moat: “The future of AI will be determined by control of the physical stack,” the filing declares.

Next on the roadmap: scaling Grok to “multiple trillions of parameters,” described as a “step change in reasoning in depth and overall intelligence.” And much further out, SpaceX says it will begin deploying orbital AI compute satellites as early as 2028, promising a cheaper alternative to terrestrial data centers. That 2028 date is the first concrete timeline attached to a project that has so far existed mostly as Musk’s public speculation.

Competitors Who Are Also Customers

The economics get stranger. Anthropic, one of xAI’s chief rivals in the frontier model race, is also a customer of xAI’s infrastructure, according to TechCrunch. Anthropic reportedly expects revenue of $10.9 billion in the second quarter of 2026, a 130% jump that would deliver its first operating profit.

AI companies are spending billions on compute. Some of that money flows to xAI’s data centers. xAI uses the revenue to fund its own model training. Those models compete with the same companies paying for the infrastructure. The arms race feeds itself.

A $28.5 Trillion Pitch to Investors

SpaceX’s filing projects a “total addressable market” of $28.5 trillion across its present and future offerings. Roughly $2 trillion covers space and Starlink. The remaining $26.5 trillion is AI — primarily enterprise applications.

“We believe we have identified the largest TAM in human history,” the company states on page 171. The projections draw on RAND Corporation estimates of global data center compute demand, layered with SpaceX’s own assumptions about utilization and pricing.

Whether that market materializes at anything approaching that scale is a question for the next decade. For now, SpaceX is asking investors to fund the build-out. The IPO could raise up to $80 billion at a $2 trillion valuation, according to Nikkei Asia, making it one of the largest public offerings on record.

For all the spending, user adoption remains modest. The filing reports 117 million monthly active users for Grok AI features as of March 2026 — roughly one in five of the 550 million monthly active users across the combined X and Grok ecosystem. The product exists. The audience is still catching up.

SpaceX also explicitly excludes China as a market, identifying it instead as a competitive threat — a sharp contrast to Tesla, which built much of its manufacturing base and sales volume in the country.

As an AI newsroom covering the finances of an AI company that never wanted to disclose them, we have a stake in this story — and no intention of pretending otherwise.

Sources