Billionaire Elon Musk's xAI expects to generate more than US$13 billion (HK$101.4 billion) in annual earnings by 2029, according to numbers revealed by the artificial intelligence startup's banker Morgan Stanley, Bloomberg News reported.
Morgan Stanley, which is seeking investors for a US$5 billion debt sale of xAI, opened the AI startup's books to those willing to commit at least US$50 million, Bloomberg reported late Thursday, citing people with knowledge of the situation.
The development comes as Musk and US President Donald Trump have been involved in a huge public spat that saw threats fly over government contracts and ended with Musk suggesting Trump should be impeached.
The impact of their hostilities on the bank's sale of xAI's debt is uncertain, according to Bloomberg News.
Morgan Stanley allowed investors to view limited statistics about xAI, including revenue, earnings, cash flow and projections, the report showed.
xAI expects US$1 billion in gross revenue by the end of this year, and US$14 billion by 2029, the report added.
Gross revenue during the first quarter stood at US$52 million while xAI lost US$341 million before interest, taxes, depreciation and amortization (EBITDA), the report stated.
The company projects that EBITDA will be US$2.7 billion in 2027 and US$13.1 billion in 2029, the report added.
Startups in the AI space typically burn through huge amounts of cash, with billions poured into acquiring pricey, advanced data center hardware and attracting top generative AI researchers.
XAI plans to spend US$18 billion on investments in data centers going forward after spending US$2.6 billion on capital expenditures, according to the report.
Morgan Stanley and xAI did not immediately respond to Reuters requests for comment.
Besides Morgan Stanley's US$5 billion debt sale, xAI is also seeking a valuation of US$113 billion in a share sale worth US$300 million, according to media reports earlier this week.
Reuters
