Building artificial intelligence at scale turns out to be expensive. Really expensive. Elon Musk's xAI, the company behind the Grok chatbot, is learning this lesson in dramatic fashion, spending close to $1 billion every month as it races to compete with OpenAI, Google, and the rest of the AI heavyweights.

Losses Pile Up as xAI Spends Big

Internal financial documents reviewed by Bloomberg reveal that xAI posted a net loss of $1.46 billion in the September quarter. That's a substantial jump from the roughly $1 billion loss the company recorded in the first quarter of the year. Over the first nine months of 2025, xAI burned through a staggering $7.8 billion in cash, pouring money into infrastructure buildouts, top-tier AI talent, and software development.

The company did manage to bring in some revenue during this period. For the three months ending September 30, xAI generated $107 million. But when you're spending nearly $1 billion a month, that revenue barely makes a dent.

People familiar with the company's finances confirmed to Bloomberg that xAI's current monthly investment rate hovers just under the $1 billion mark. xAI did not respond to requests for comment from MarketDash.

A $20 Billion Lifeline

Fortunately for Musk, xAI isn't running on fumes just yet. Earlier this week, the startup announced it closed a massive $20 billion Series E funding round, pushing its valuation to an eye-popping $230 billion. The investor lineup reads like a who's who of tech and finance: Nvidia (NVDA), Cisco Investments (CSCO), Fidelity, Valor Equity Partners, Stepstone Group (STEP), Qatar Investment Authority, Abu Dhabi's MGX, and Baron Capital Group all participated.

That fresh capital should keep xAI's ambitious expansion plans on track, at least for now. But with spending at this pace, even $20 billion won't last forever. The real question is whether xAI can turn its technology into meaningful revenue before the money runs out.