SpaceX IPO filing exposes xAI’s $6.4 billion loss and $30.8 billion annual spend

SpaceX’s initial public offering filing with the US Securities and Exchange Commission has disclosed that Elon Musk’s artificial intelligence subsidiary, xAI, incurred an operational loss of $6.4 billion on $3.2 billion in revenue during 2025. The documents mark the first public glimpse into the financials of xAI and its parent social media platform, X, following the merger of the two entities in February. The widening gap between earnings and expenditure signals a period of aggressive investment in AI infrastructure ahead of the combined company’s potential listing.

The financial deterioration at xAI is stark when compared to the previous year. In 2024, the AI division reported a loss of $1.56 billion against $2.62 billion in revenue. By 2025, losses had ballooned to $6.4 billion, even as revenue grew. This growth was largely driven by AI solutions and infrastructure revenue, which totalled $465 million, comprising $365 million from X and Grok subscriptions, $88 million in data licensing, and $116 million from advertising.

Capital expenditure for the AI segment has accelerated at a rapid pace, rising from $12.7 billion in 2025 to $7.7 billion in the first quarter of 2026 alone. This trajectory indicates an annualised run rate of approximately $30.8 billion, more than doubling year-on-year. The spending is underpinned by the construction of the Colossus and Colossus II data centres, which were built in 122 and 91 days respectively and collectively provide around one gigawatt of compute power. These facilities are secured by a landmark compute agreement with Anthropic, valued at up to $40 billion, which guarantees xAI’s revenue stream through May 2029.

Despite the massive outlay, user adoption for Grok remains a fraction of the total ecosystem. As of March 2026, SpaceX recorded 117 million monthly active users for Grok AI features out of 550 million total monthly active users across Grok and X combined. This implies that only 20 per cent of the combined user base is actively utilising the AI features, highlighting the challenge of converting social media traffic into AI engagement amidst heavy infrastructure costs.

The filing outlines plans to scale the Grok model to “multiple trillions of parameters,” a move described as a step change in reasoning and intelligence that will require significant additional compute expenditure. Beyond terrestrial data centres, SpaceX intends to deploy orbital AI compute satellites as early as 2028, offering a concrete timeline for this initiative. The combined entity, which targets a potential valuation of $1.75 trillion, asserts that vertical integration across the AI stack allows it to train and iterate frontier models at lower cost and higher velocity.