A Morgan Stanley report indicates that Elon Musk’s artificial intelligence startup xAI will generate more than $13 billion in yearly profits until 2029 while the bank markets $5 billion in debt financing for the company.
The data provided to investors who will invest at least $50 million shows xAI expects to reach $1 billion in gross revenue this year before reaching $14 billion by 2029. The first quarter financial results of xAI showed a $341 million loss before interest, taxes, depreciation, and amortization expenses.
The company plans to expand its data center infrastructure spending by investing $18 billion in future projects after already spending $2.6 billion on capital expenditures. The AI industry requires startups to invest heavily in advanced hardware and top talent acquisition because they need to compete in generative AI.
The debt sale faces uncertain prospects because of Musk’s public disagreement with President Trump regarding government contracts and the tax bill although Morgan Stanley remains silent about the situation. The bank has revealed xAI’s financial data to potential investors who want to back the company according to Bloomberg News.
The $300 million share sale will help xAI achieve a $113 billion valuation while the company pursues a $113 billion valuation through the sale. The company demonstrates its market ambitions through these financial figures while facing political challenges and market obstacles surrounding Musk.
