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According to Forbes, the artificial intelligence company xAI, led by Musk, is growing rapidly and is expected to become profitable by 2028. According to a recording of an investor conference call, xAI currently has $10 billion in cash on hand and has shown rapid revenue growth. Jonathan Schrager from Valor Equity Partners mentioned at the meeting that xAI plans to raise up to $15 billion in equity financing, and the demand for this funding in the market has been clearly stated.
Despite holding a large amount of money, xAI still needs more funds to support its massive infrastructure construction. To reduce costs and risks, the company is adopting an innovative financing model to accelerate the construction of data centers. Currently, xAI's Chief Financial Officer is Anthony Armstrong, a seasoned banker, who is responsible for this new financing plan.
At the same time, OpenAI is expected to achieve positive cash flow by 2030, due to its plan to invest $140 billion in AI infrastructure. Another competitor, Anthropic, is also predicted to achieve profitability by 2028, which aligns with xAI's expectations.
In terms of data center construction, xAI is collaborating with Valor Equity Partners to acquire and lease computing facilities through a special purpose vehicle (SPV). This financing vehicle, named Valor Compute Infrastructure, aims to raise $7.5 billion in cash and plans to purchase $22 billion in computing resources. Nvidia has already committed to providing $2 billion in funding support, and other private equity companies have also participated in the investment.
It is reported that this financing plan is expected to bring an internal rate of return of 9% to investors. Valor Compute Infrastructure plans to use the funds to purchase Nvidia's GB200 chips and other advanced computing equipment to meet xAI's computing needs. Schrager emphasized in the conference call that xAI's financing strategy aims to reduce the cost of capital and avoid equity financing fees as high as 40% to 50%.
Key Points:
🌟 xAI is expected to become profitable in 2028, and currently has $10 billion in cash.
💰 The company is using an innovative financing method to accelerate data center construction to meet computing demands.
🚀 OpenAI is expected to achieve positive cash flow by 2030, while Anthropic is also predicted to become profitable by 2028.