Musk’s xAI eyes $13 billion annual earnings by 2029

Investing.com -- Elon Musk’s artificial intelligence startup, xAI, is projected to generate more than $13 billion in annual earnings by 2029, according to figures disclosed by the company’s banker, Morgan Stanley (NYSE:MS), as reported by Bloomberg News. The bank is currently courting investors for a $5 billion debt sale of xAI and has opened the startup’s financials to those ready to invest a minimum of $50 million.

The move comes amidst a high-profile dispute between Musk and U.S. President Donald Trump over government contracts, which concluded with Musk suggesting Trump should be impeached. The effect of this conflict on Morgan Stanley’s debt sale for xAI remains unclear.

The bank provided potential investors with access to select financial details about xAI, including information about its earnings, revenue, cash flow, and financial projections. xAI anticipates gross revenue of $1 billion by the end of this year, and $14 billion by 2029. The company’s gross revenue in the first quarter was $52 million, while it reported a loss of $341 million before interest, taxes, depreciation, and amortization (EBITDA). xAI projects that its EBITDA will reach $2.7 billion in 2027 and $13.1 billion in 2029.

AI startups like xAI typically consume large amounts of cash, investing billions in advanced data center hardware and recruiting top generative AI researchers. xAI has plans to invest $18 billion in data centers in the future, after already spending $2.6 billion on capital expenditures.

In addition to Morgan Stanley’s $5 billion debt sale, xAI is also pursuing a valuation of $113 billion in a share sale worth $300 million, according to media reports from earlier this week.

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