Elon Musk’s artificial intelligence startup xAI is spending aggressively to build out its computing backbone, driving sharply higher losses even as revenue begins to scale. The company reported a net loss of $1.46 billion for the September quarter, up from $1 billion in the previous quarter, reflecting heavy investment in AI infrastructure and model development, DKNews.kz reports.
Revenue Nearly Doubles, but Cash Burn Remains Heavy
For the period ending September 30, 2025, xAI’s revenue nearly doubled to $107 million, highlighting early commercial traction for the company’s AI products.
That growth, however, has not come close to offsetting expenses. Over the first nine months of the year, xAI burned through $7.8 billion in cash, underscoring the capital-intensive nature of the race to build large-scale AI systems.
A $20 Billion Data Center Bet in Mississippi
Separately, the office of Mississippi Governor Tate Reeves announced that xAI plans to invest more than $20 billion to build a massive data center in Southaven, marking the largest private investment in the state’s history.
The new facility, dubbed MACROHARDRR, will supply computing power for xAI’s Colossus supercomputer, a cornerstone of Musk’s strategy to compete with leading AI developers by controlling its own infrastructure.
2 Gigawatts of Computing Power
Once fully built, the MACROHARDRR data center - together with an existing xAI facility in Southaven and a nearby campus in Memphis - will give the company access to up to 2 gigawatts of computing capacity.
That level of power consumption is comparable to that of a large city and signals xAI’s intention to reduce reliance on cloud providers in favor of a vertically integrated AI platform.
Musk’s Playbook: Scale First, Profit Later
The growing losses at xAI follow a familiar Elon Musk playbook. Rather than prioritizing near-term profitability, the company is racing to build scale, betting that control over compute, data, and infrastructure will prove decisive in the long run.
Investors increasingly view xAI less as a conventional startup and more as a long-term AI infrastructure project, designed to challenge players such as OpenAI and Google on raw computing capability.
What This Means for the AI Industry
xAI’s trajectory highlights just how capital-hungry the AI boom has become. Multi-billion-dollar losses and tens of billions in infrastructure spending are quickly becoming the price of admission for companies seeking leadership in the next generation of artificial intelligence.
For the broader market, the message is clear - the future of AI will be shaped not only by algorithms, but by access to energy, computing power, and the willingness to invest at unprecedented scale.
