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There’s a wildcard in every race, no less the generative AI race.
2024 has been a big year for Elon Musk’s AI startup, xAI. From a twinkle in his eye in 2023, xAI has grown to release Grok, one of the top multimodal AI models on the market.
Earlier this year, Grok 2’s high-resolution images showed that the vendor could compete against the top multimodal LLMs from OpenAI and Runway.
This, along with potential partnerships with Tesla, an integration with Optimus, and access to real-time data from X, has made xAI one of the most exciting startups to watch.
With Musk purchasing 100,000 Nvidia GPUs and building a new supercomputer, it’s time to ask what’s next for AI’s fastest-growing startup.
Key Takeaways
- Elon Musk’s xAI is a high-potential contender in the generative AI market.
- xAI’s Grok model competes with top multimodal LLMs from OpenAI and Runway.
- xAI’s future advancements may bring in Tesla and X platform data.
- We can see Grok 3’s release in late 2024 placing xAI alongside leading AI platforms.
- Challenges include competing against ChatGPT and accessibility limitations.
Where is xAI in the AI Startup Race?
XAI was founded in March 2023 and attracted a lot of attention as Musk’s direct entrance into the AI race after his business relationship with OpenAI soured.
In November 2023, xAI released its humorous AI chatbot Grok, trained on real-time data across the X platform, which led to the company raising a $6 billion funding round in May 2024.
This valuation valued the company at $24 billion and made xAI one of the world’s most valuable AI startups, alongside OpenAI and Anthropic.
Our experts consider the company one to watch, including Shashi Bellamkonda, principal research director at Info-Tech Research Group, who told Techopedia:
“I think xAI is a dark horse and will be a significant competitor to the other AI companies. The recent $6 billion fundraising from reputed investors, along with a $24 billion valuation, is a promising sign, even though this valuation is still lower than OpenAI’s.”
Elon Musk is undoubtedly a big reason for the interest in xAI. His proximity to Tesla and X makes Grok and xAI a compelling duo, as its innovations could eventually make their way into Tesla’s vehicles and robotics.
All these ingredients raise some interesting questions about how far xAI’s AI ecosystem can spread in the future.
So, What’s Next for xAI?
It appears that one of xAI’s main goals is to take OpenAI and ChatGPT‘s spot as the public’s go-to AI chatbot. This means Musk will need to take on future releases from OpenAI, such as GPT-5 or its rumored Orion model.
To help xAI compete, Musk is building a supercomputer called Colossus, which will be used to train Grok. According to Musk, Colossus is the most powerful AI training system in the world, featuring 100,000 Nvidia H100s, with plans to increase this to 200,000 (with 50,000 H200s) towards the end of 2024.
Building one of the largest generative AI clusters in the world will enable the startup to better train and optimize Grok 3’s performance. At this stage, not much is known about Grok 3’s capabilities — all we know is that it’s planned to launch toward the end of 2024.
Grok 3 end of year after training on 100k H100s should be really something special
— Elon Musk (@elonmusk) July 1, 2024
xAI is reportedly working to develop Grok 3 to be similar to or better than a GPT-5 release, but this will be a tall task given OpenAI’s entrenched position in the market.
Can xAI Compete Against OpenAI?
The big question about xAI is whether it can take the top spot in the AI race. Early successes and rapid funding growth appear to show that it could if it continues to make the right moves.
In a short space of time, Grok has become a popular and high-performance large language model (LLM). Its text-to-text capabilities are comparable to those of top tools like ChatGPT and Claude and its image generation is comparable to that of Runway or DALL-E 3.
However, with more than 180 million weekly active users and a $157 billion OpenAI valuation behind it, ChatGPT is the tool to beat, having both an early mover’s advantage and a free version with GPT-4o Mini, which Grok lacks because it’s only available to X Premium and Premium+ subscribers.
Bellamkonda added:
“In the short time xAI has been around, I’m impressed by its results in both content generation and image creation.
“The limitation today is that unlike OpenAI, which gives access to almost every internet user through a browser, xAI can only be accessed by Premium and Premium+ members of X (formerly known as Twitter) and only in countries where X premium is available.”
Besides that, Grok’s core capabilities, such as question answering, generating images, and producing code, are extremely competitive with ChatGPT, so it’s really only the chatbot’s availability that’s holding it back.
Lastly, it’s worth considering that Grok may have a reputational advantage as it offers a less-moderated tool than ChatGPT, which offers a more heavy-handed approach to moderation.
In any case, xAI’s near future depends on Grok 3’s performance against OpenAI Orion. If it can knock it out of the park, then the gap will likely start to close slowly.
The Bottom Line
xAI is one of the most exciting AI startups in the world today. It’s come a long way in such a short space of time, and potential integrations with Tesla products like the Optimus and Robotaxi make this a must-watch vendor for the foreseeable future.
Whether xAI can live up to Tesla or Space X’s success is up for debate, but its rapid growth so far is undeniable.
