Elon Musk’s artificial intelligence venture xAI is on track to reach profitability by around 2028 and is currently holding roughly $10bn in cash, according to details from an investor presentation seen by Forbes.
During a call with prospective backers, Jonathan Shulkin of Valor Equity Partners said the company’s revenues were growing rapidly and that xAI could become cash-flow positive within the next two and a half to three years. He also noted that the firm is in the process of raising new equity, with an initial target of $15bn, though demand from investors suggests the final sum could be significantly higher.
Shulkin, who said he briefly served as xAI’s chief financial officer earlier this year, explained that the company is also relying on an unconventional financing structure to speed up the construction of data centres while reducing costs and financial risk. xAI’s current CFO is veteran banker Anthony Armstrong.
When asked to comment, an xAI spokesperson dismissed the report with a brief statement criticising “legacy media”. Nvidia declined to comment, while Valor Equity Partners did not immediately respond.
The projected timeline would put xAI ahead of some of its main rivals. OpenAI has previously indicated it does not expect to become cash-flow positive until around 2030, reflecting its heavy spending commitments on AI infrastructure, estimated at up to $1.4tn. Anthropic, another major player, has suggested it could break even by 2028, according to reporting by The Wall Street Journal.
As with most AI companies, xAI’s outlook depends heavily on access to vast computing resources. Large-scale data centres can cost between $20bn and $30bn to build, meaning even well-funded firms require continual capital. xAI is pursuing this through both traditional equity fundraising and a special-purpose vehicle (SPV) set up by Valor Equity Partners.
That vehicle, known as Valor Compute Infrastructure, is seeking to raise $7.5bn in cash alongside a similar amount in debt. Backers reportedly include Nvidia, which has committed $2bn, as well as several private equity firms and individual investors. The fund plans to lease high-end computing equipment to xAI, providing investors with quarterly payouts and a targeted return of around 9%.
According to the investor materials, the vehicle aims to acquire about $22bn worth of computing hardware, including large orders of Nvidia’s latest chips. Supporters argue the structure allows xAI to secure critical infrastructure at a lower cost than relying solely on equity funding, potentially accelerating its path to profitability.
