Is xAI profitable?
The privately held xAI doesn't need to publicly disclose its financial information to investors, so there isn't much publicly available information about its revenue and profitability.
However, given that the company had only been operating for a little more than two years by early 2026, it likely wasn't profitable and was a long way from making money. The AI start-up was only generating about $100 million in annual revenue.
Meanwhile, the company is investing heavily in buying chips from Nvidia to train AI models and hiring to grow its team. These heavy investments likely mean the company is losing a lot of money.
While xAI is presumably losing money, the company raised another $6 billion in cash from investors in late 2024 and $20 billion in 2026 to help fund its investments. That gives it lots of money to fund product development, build infrastructure, and accelerate its research and development activities. However, it will eventually need to start making money to become a sustainable business and justify its lofty valuation.
Alternatives to xAI stock
Since xAI is a private company, you can't buy shares in a brokerage account. However, accredited investors (i.e., those with a high net worth or high income) can sometimes buy shares of pre-IPO companies on secondary marketplaces, like Forge Global (NYSE:FRGE) and Hiive.
A different path to consider is investing in a publicly traded company focused on AI. Three top AI stocks are:
Nvidia
Nvidia is a leading semiconductor company. It has developed many of the chips AI companies are using to power their models.
The company is an investor in xAI, having participated in its $6 billion funding round in late 2024. That funding round gave the AI startup the cash to buy 100,000 Nvidia chips to build a new supercomputer in Memphis. The growing purchases of Nvidia's AI chips are driving robust revenue and earnings growth for the semiconductor company.
Meta Platforms
Meta Platforms (META -1.18%) is spending aggressively on AI. It's building several AI services, including its AI assistant, Meta AI, and plans to build AI products, scale them, and then monetize them, which has been a successful playbook in the past. The company believes it has the talent, data, and ability to scale infrastructure to build the world's leading AI models and services.
Tesla
Musk's car company, Tesla (TSLA +4.02%), is investing heavily in AI. The company planned to spend $5 billion on AI initiatives in 2024 and 2025, including buying chips from Nvidia. Tesla focuses on using AI to advance the development of full self-driving software and robotics. Musk would like to grow Tesla into a leader in AI and robotics.
