SpaceX Merger Provides Lifeline for Musk’s Debt-Ridden AI Startup
Musk’s xAI startup has taken on billions in debt to finance its investments in building AI services.
Photographer: Andrey Rudakov/BloombergBy many counts, SpaceX is the most successful venture Elon Musk ever started. The rocket maker revolutionized the space industry, built a multibillion-dollar business fueled by lucrative government contracts and a growing satellite communications network, and still has few credible competitors.
XAI Holdings is not that. The company, which owns Musk’s AI startup and the social network X, is saddled with billions of dollars in debt, besieged by well-funded rivals and faces mounting regulatory scrutiny after its chatbot spread sexualized images. It also brings in scant revenue, compared to SpaceX. Much of what it does generate comes from Musk’s other businesses.