xAI, the artificial intelligence company founded by Elon Musk and subsequently acquired by SpaceX, has seen its losses mount, according to SpaceX’s recent S-1 filing. XAI had an operating loss of USD 2.47 billion on USD 818 million in revenue in the first quarter of 2026, representing 17% of SpaceX’s overall revenue of USD 4.69 billion for the quarter.
SpaceX’s IPO prospectus, which lays out xAI’s user and revenue growth, is the most detailed picture yet of an AI frontier model company’s finances. It’s a picture of accelerating losses and spending as xAI fights to keep up with its rivals. In 2025 alone, xAI lost USD 6.36 billion on USD 3.20 billion in revenue.
“If you compare xAI to a traditional SaaS company, the financials look reckless,” says Harrison Rolfes, a senior research analyst at PitchBook who covers the major AI frontier labs. “The ‘insanity’ isn’t in the spending, but the bet that by the time other firms get their GPU clusters online, xAI will have already moved the goalposts toward autonomous physical agents. If that payoff happens, the billion-plus-per-month burn will be viewed as a bargain. If it doesn’t, we are looking at the largest venture-funded correction in history.”
The Grok chatbot maker’s capital expenditures have ballooned, providing the fullest picture yet of the cost of GPU spending and data center expansion for a major LLM maker. In 2025, xAI spent USD 12.7 billion in capex—more than the combined USD 8.0 billion SpaceX spent on its Starlink satellite internet service and rocket launch service. For 2026, xAI is already on track to far exceed last year’s spending, with USD 7.7 billion in the first quarter alone.
But xAI’s growing capex doesn’t lack a business case. In May, Anthropic—one of the company’s chief competitors—agreed to pay xAI USD 1.25 billion per month to access compute through its Colossus data center. The prospectus states that either party can terminate the agreement with 90 days’ notice and that SpaceX is looking to enter similar deals.
Grok has 117 million monthly active users, but with a caveat: Only 1.9 million pay to access xAI’s advanced models. There are also 4.4 million paying X users who have access to some of Grok’s models. A bright spot is that xAI’s merger with SpaceX has improved its debt situation. xAI had been an aggressive borrower, taking on USD 16 billion in new debt in 2025 alone to fund its GPU buildout. In March 2026, SpaceX took out a USD 20 billion bridge loan at a significantly cheaper rate and used the proceeds to pay off xAI’s debt stack, effectively refinancing it onto SpaceX’s balance sheet.
How xAI performs over the coming quarters will be an important signal for investors eyeing OpenAI and Anthropic’s IPOs. Both companies are reportedly considering pulling the trigger as soon as the third quarter, as they look to the public markets to fund their ever-expanding capital requirements.
Despite media reports of heavy losses, OpenAI and Anthropic haven’t had difficulties attracting investors. The latter signed a term sheet valuing it at USD 900 billion earlier this month, the Financial Times reported. And multiple news outlets report that OpenAI could confidentially file a draft of its prospectus with the SEC as soon as Friday.
xAI’s revenue growth is dwarfed by that of OpenAI and Anthropic, whose flagship ChatGPT and Claude products are driving their business sales. OpenAI CFO Sarah Friar disclosed in a January blog post that the firm’s annualized revenue run rate more than tripled from USD 6 billion to over USD 20 billion in 2025. On Wednesday, The Wall Street Journal reported that Anthropic expects to generate USD 10.9 billion in revenue in the second quarter (up from USD 4.8 billion in the first) and post an operating profit of USD 559 million.
While SpaceX’s public debut and subsequent public performance won’t be a perfect proxy for the market’s confidence in LLM companies, it will provide investors with some visibility into the category’s economics.
