According to Bloomberg, xAI, founded by Tesla founder Elon Musk just two years ago, is raising $9.3 billion at the same time: $4.3 billion in equity new shares and $5 billion in unsecured bonds. (Synopsis: Telegram received $300 million in cash and equity from xAI, and Musk threw money to push Grok and TON to jump 20%) (Background supplement: Musk fights his xAI computing power!) Rumored to raise a new round of financing, aiming for $6 billion) According to "Bloomberg", Tesla founder Elon Musk (Elon Musk) founded xAI, only two years ago, currently has a monthly cash outflow of up to $1 billion, if the current pace of expansion, the annual cash burn in 2025 may exceed $13 billion. In response to massive spending pressures, the company is raising $9.3 billion in new funding: $4.3 billion in equity new shares and $5 billion in unsecured bonds. The financing portfolio is understood at one time According to reports, the equity part is still negotiating, with a target amount of $4.3 billion; The bonds are 8 years at face and are proposed to be paid an annual interest of 6.5% with a convertible clause. According to public information, xAI has raised a cumulative share capital of $14 billion since its establishment in 2023, and if it is fully completed, the total fundraising will exceed $23 billion. Where will the money burn? If the new financing is successful, it is expected that the largest overhead will fall on GPU clusters and Nvidia servers. Previously, the new generation of Colossus supercomputer plan of foreign media analysis xAI will purchase up to 1 million GPUs, the cost is between 350~40 billion US dollars, plus data purchase and annotation costs, the total investment is much higher than that of traditional software companies. It is worth mentioning that after xAI completed the acquisition of the X platform in March this year, the consolidated valuation rose to $80 billion; Outside investors revealed that if Grok could cash out a lot on X, it would be valued at $113 billion. And xAI wants to be able to train the company's new models with constantly updated data on X, rather than paying for datasets like other AI companies do. However, compared with OpenAI's $40 billion financing negotiation in March at a valuation of $300 billion, there is still a gap between the two sides. Risks and What's Next But we know that huge leverage can dilute shareholders' equity and increase interest burdens. Investors are currently eyeing the conversion rate of Grok's paid subscriptions and the progress of its integration with X's advertising backend. After Trump takes office, the AI risk assessment mechanism in the Biden-era executive order may also be rewritten, and the regulatory runway remains unclear. Musk previously reminded on X: "The cost of AI security is much higher than imagined." But either way, if the new funding is in place, xAI can at least survive the next round of model upgrades. Whether we can really strike a balance between burning money and monetizing depends on the penetration rate of Grok's products and the revenue contribution of the X ecosystem. Related reports Musk merges xAI and X (Twitter) to fully assist Grok, with a total valuation of 113 billion magnesium Musk's xAI completed a $6 billion Series C financing, Huida, BlackRock, a16z... Musk's xAI is "free to open Grok-2" to all X users, and the three highlights of the new feature are watched at one time "Musk xAI burns $1 billion a month to quickly break cooking?" Zhengxin raised $9.3 billion, revenue capacity status" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Elon Musk's xAI burning 1 billion dollars a month close to running out? Zhengxin raises 9.3 billion dollars, revenue capacity status.
According to Bloomberg, xAI, founded by Tesla founder Elon Musk just two years ago, is raising $9.3 billion at the same time: $4.3 billion in equity new shares and $5 billion in unsecured bonds. (Synopsis: Telegram received $300 million in cash and equity from xAI, and Musk threw money to push Grok and TON to jump 20%) (Background supplement: Musk fights his xAI computing power!) Rumored to raise a new round of financing, aiming for $6 billion) According to "Bloomberg", Tesla founder Elon Musk (Elon Musk) founded xAI, only two years ago, currently has a monthly cash outflow of up to $1 billion, if the current pace of expansion, the annual cash burn in 2025 may exceed $13 billion. In response to massive spending pressures, the company is raising $9.3 billion in new funding: $4.3 billion in equity new shares and $5 billion in unsecured bonds. The financing portfolio is understood at one time According to reports, the equity part is still negotiating, with a target amount of $4.3 billion; The bonds are 8 years at face and are proposed to be paid an annual interest of 6.5% with a convertible clause. According to public information, xAI has raised a cumulative share capital of $14 billion since its establishment in 2023, and if it is fully completed, the total fundraising will exceed $23 billion. Where will the money burn? If the new financing is successful, it is expected that the largest overhead will fall on GPU clusters and Nvidia servers. Previously, the new generation of Colossus supercomputer plan of foreign media analysis xAI will purchase up to 1 million GPUs, the cost is between 350~40 billion US dollars, plus data purchase and annotation costs, the total investment is much higher than that of traditional software companies. It is worth mentioning that after xAI completed the acquisition of the X platform in March this year, the consolidated valuation rose to $80 billion; Outside investors revealed that if Grok could cash out a lot on X, it would be valued at $113 billion. And xAI wants to be able to train the company's new models with constantly updated data on X, rather than paying for datasets like other AI companies do. However, compared with OpenAI's $40 billion financing negotiation in March at a valuation of $300 billion, there is still a gap between the two sides. Risks and What's Next But we know that huge leverage can dilute shareholders' equity and increase interest burdens. Investors are currently eyeing the conversion rate of Grok's paid subscriptions and the progress of its integration with X's advertising backend. After Trump takes office, the AI risk assessment mechanism in the Biden-era executive order may also be rewritten, and the regulatory runway remains unclear. Musk previously reminded on X: "The cost of AI security is much higher than imagined." But either way, if the new funding is in place, xAI can at least survive the next round of model upgrades. Whether we can really strike a balance between burning money and monetizing depends on the penetration rate of Grok's products and the revenue contribution of the X ecosystem. Related reports Musk merges xAI and X (Twitter) to fully assist Grok, with a total valuation of 113 billion magnesium Musk's xAI completed a $6 billion Series C financing, Huida, BlackRock, a16z... Musk's xAI is "free to open Grok-2" to all X users, and the three highlights of the new feature are watched at one time "Musk xAI burns $1 billion a month to quickly break cooking?" Zhengxin raised $9.3 billion, revenue capacity status" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".