CITIC Securities: xAI currently exhibits the characteristics of "infrastructure first, model second". The commercial potential of the Grok4.5 model and its applications still need to be verified.

The research report from Citic Securities indicates that xAI is an important participant in the global AI model industry and is also an important part of SpaceX's "space-connect-AI" strategy. The company has formed a preliminary closed loop of "computing power-data-model-application" based on the Colossus cluster, real-time data from X, the Grok model, and the Cursor developer portal. We believe that xAI currently exhibits the characteristic of "infrastructure in the front line, models in the second line", with mid-term growth mainly coming from computing power leasing and Cursor, while the commercial potential of the Grok 4.5 model and application is still to be verified. The company's capital expenditure on computing infrastructure is $12.7 billion, but AI-native revenue is less than $500 million, showing a clear mismatch between commercial progress and infrastructure investment. We believe that the company's growth will mainly depend on the growth of its computing power leasing and Cursor, with the computing power leasing business having an order scale of $80 billion as the core driving force of xAI's growth. The large model industry is currently at a dual turning point of technology and business. We are optimistic about AI infrastructure manufacturers with order and delivery capabilities, as well as AI application investment opportunities that can pioneer user growth and commercial value realization. Subsequent focus will be on the commercial product forms, the evolution of model manufacturer competition landscape, and the growth curve of revenue and profit.