Elon Musk’s artificial intelligence startup xAI debuted its updated Grok-3 model, showcasing a version of the chatbot technology to challenge OpenAI days after the billionaire’s unsolicited cash bid to buy the company was rejected.
Across math, science and coding benchmarks, Grok-3 beats OpenAI’s GPT-4o, Alphabet Inc.’s Google Gemini, DeepSeek’s V3 model and Anthropic’s Claude, xAI said via a live stream on Monday. Grok-3 has “more than 10 times” the compute power of its predecessor and completed pre-training in early January, Musk said in a presentation alongside three xAI engineers.
Musk’s performance claims, which have not been independently verified, ramp up an increasingly bitter rivalry between his startup and OpenAI. He launched xAI in 2023 as an alternative to the ChatGPT maker, which he’s publicly criticized for its plans to restructure as a for-profit business.
Musk, the world’s richest person, has filed two lawsuits against OpenAI for allegedly straying from its founding principles and offered to buy OpenAI’s nonprofit arm for $97.4 billion in a bid that was rejected last week. OpenAI Chief Executive Officer Sam Altman classified the bid as a tactic to “slow us down.” Musk was involved in OpenAI’s founding but has been critical of the company since leaving the board in 2018.
XAI also introduced a new smart search engine with Grok-3, calling it DeepSearch. DeepSearch is a reasoning chatbot that expresses its process of understanding a query and how it plans its response. It includes options for research, brainstorming and data analysis, the demonstration showed. Musk’s team also said it intends to release a voice-based chatbot.
“We’re continually improving the models every day, and literally within 24 hours, you’ll see improvements,” Musk said.
Grok-3 is available Premium+ subscribers on X, a service that costs $22 a month. That compares to $200 a month for full access to OpenAI’s GPT-4o. xAI is starting a new subscription called SuperGrok for the bot’s mobile app and Grok.com website, and plans to open-source preceding versions of Grok models as soon as the latest one is fully mature. Musk said he expects that transition to be complete for Grok-3 in a few months.
After the Grok-3 updates were released, Andrej Karpathy, an OpenAI co-founder no longer at the company, posted a preliminary review of the new model on X, writing that it “feels somewhere around the state of the art territory of OpenAI’s strongest models.” But the computer scientist, who formerly lead AI efforts at Tesla Inc., said Musk’s model also fabricated facts and lagged behind in certain functions. Karpathy said more evaluations are needed over the next days and weeks to get a better idea of the model’s capabilities.
AI powerhouses like OpenAI and xAI have raised funds at a rapid clip with valuations soaring. Musk’s xAI is in talks to raise about $10 billion in a funding round that would value the company at roughly $75 billion, Bloomberg News reported last week. The company was last valued at about $51 billion, according to data compiled by PitchBook.
OpenAI is in talks to raise as much as $40 billion in a round that would push its valuation to as much as $300 billion.
These businesses are also capital-intensive. SoftBank Group Corp., OpenAI, Oracle Corp. and Abu Dhabi-backed MGX jointly announced a program in January to deploy $100 billion, with the goal of eventually spending $500 billion, for the construction of data centers and other infrastructure for AI in the US. Dell Technologies Inc. is at an advanced stage of securing a deal worth more than $5 billion to provide xAI with servers optimized for AI.
But rival technologies are emerging that could challenge this model and make it easier for new competitors to emerge. Last month, Chinese AI company DeepSeek released a new open-source AI model, called R1, that matched or beat leading US competitors on a range of industry benchmarks. The company said it built the model for a fraction of the cost of its US counterparts.
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