Elon Musk’s generative artificial intelligence startup xAI is expected to generate $13B in annual earnings by 2029, Bloomberg reported, citing documents by its banker, Morgan Stanley.
Founded in March 2023 and publicly unveiled to the world a few months later, xAI generated $52M in gross revenue in the first-quarter and lost $341M in EBITDA, the news outlet added, citing people familiar with the bank’s presentation.
The widely watched metric by investors is expected to hit $2.7B in 2027 and $13.1B in 2029, one of the people added.
Gross revenue is expected to hit $1B this year and $14B by 2029, the person added. Cash flow from operations was a negative $220M, following $2.6B in capital expenditures, of which the majority was on data centers. Data center spending is expected to hit $18B going forward.
Musk’s xAI did not immediately respond to a request for comment from Seeking Alpha.
Musk wanted to put a “proper value” on xAI, according to media reports in April. Maker of the Grok chatbot, xAI raised $6B in new funding late last year that valued the company at $50B. Some of that funding went towards xAI’s massive data center in Memphis, where it used 100,000 of Nvidia’s (NVDA) H100 GPUs.
In March, xAI acquired Musk’s social network X in an all-stock deal. The move propelled xAI to a $113B valuation.
Earlier this week, it was reported that xAI would hold a $300M share sale for new investors.
Musk, who also leads SpaceX (SPACE) and Tesla (NASDAQ:TSLA), said in July 2024 he would bring the idea of Tesla investing $5B into xAI to the electric vehicle maker’s board of directors after the idea received nearly two-thirds of “yes” votes in an online poll.