When Elon Musk launched his own AI startup, XAI, he touted a key advantage over his competitors: access to vast troves of data from his newly acquired social media platform Twitter. By imposing new API fees on the network he immediately renamed X, Musk locked out other AI companies, maintaining exclusive access to his own models. And they started using millions of users of X to test the results.
Musk has been using this distribution channel since xAI launched the first version of the Grok large language model Features like Trending Story Summary and AI-generated questions also on post As of releasing Grok chatbot (initially) Exclusively for X users. Now, many new AI features are coming. Per conclusion Reverse engineer Nima Owji, the platform is developing AI-powered post enhancements, including a feature that lets Grok modify your tweets. chatbot It appears that location-based queries are also being addedSo users can ask about things nearby, like grocery stores.
xAI's takeover of the platform once known as Twitter is so unmistakeable that its branding has even become some of X's most visible real estate, now commanded by “xAI Grok.” Prominent position in the app's main toolbar — a striking symbol of how Musk's AI ambitions have come to dominate the social network. An XAI employee poked fun at his company's growing presence, sharing an image of X's timeline overrun with the XAI logo.
XAI and X probably have the closest and most complex relationship of all of Musk's companies. On paper, all XAI employees are also X employees (but not vice versa); In addition to access to the code base, they have company laptops from X and appear as X employees in the platform's Workday HR software. After X vacated its flagship San Francisco headquarters in September, employees moved to XAI headquarters in Stanford Research Park in Palo Alto. X provides an instant pipeline to XAI for millions of users – far more efficient than building Grok's audience from scratch. With XAI's newly acquired Colossus cluster of 100,000 GPUs, it has also become technically more possible to deploy AI features in X.
Musk has a history of building interconnected, interdependent companies. For example, Tesla and SpaceX share engineering expertise, and after Musk acquired Twitter, Tesla and Boring Company teams were a common sight in its offices. Musk's supporters consider this a genius strategic advantage. Critics argue that the complex relationships between their enterprises can create conflicts of interest, blur the lines of accountability and expose the companies to shared vulnerabilities.
On paper, all XAI employees are also X employees (but not vice versa)
Sources reveal that the relationship between X and XAI is complex, with varying levels of collaboration between their teams. The VergeWhile Musk holds separate meetings with both X and XAI engineers, the extent of day-to-day collaboration between the companies is unclear. For six months, XAI brought on ex-Meta and Discord product leader Nikita Bear to guide AI implementation on XAI's platform, including AI-generated questions for posts -Notably, Bear worked exclusively with XAI, rarely connecting with X's team. (Prior to Grok's release, X had considered forming its own generative AI team under Musk's cousin James). There is some talent flow between the companies – LinkedIn shows that xAI recruited two X engineers in September.
The funds raised for XAI are separate from those raised for X, a setup that highlights their huge difference in value. xAI has seen meteoric rise, Allegedly Achieving a valuation of $50 billion and effectively doubling its value in just a few months. Meanwhile, X has struggled to maintain value. This is the most recent employee stock grant. The company is valued at $19 billion in October 2023, less than half of Musk's $44 billion purchase price. X employees who received RSUs at $45 per share Waiting more than a year for new stock grants Whereas they are seeing the valuation of their sister company increasing. During XAI's first funding round, Musk said investors in owns 25 percent of XAI, but it did not apply to X employees who owned X stock.
And while xAI has benefited tremendously from being linked to Shortly after X launched the Grok-powered Stories feature, it started spewing garbage: this made headlines claiming Vice President Kamala Harris shot after Donald Trump's assassination attempt; Too many nonsense posts misunderstood Regarding New York Mayor Eric Adams, he said that he deployed 50,000 police officers for the earthquake; And erroneously claimed AI-generated headline reads “Iran attacks Tel Aviv with heavy missiles.” (Grok, obviously, isn't the only AI service with this problem,
Despite the two companies' unconventional entanglement, it is unlikely that the two will fully merge any time soon. The ideology behind Musk presented at an XAI recruiting party a few months ago). This is exactly the kind of audacious moonshot that makes Silicon Valley's top talents and richest people lean forward in their chairs.
Meanwhile, at X, some employees joke that they are no longer Musk's favorite children. That much is clear in the product. His dream of making it an “everything app” has failed to materializePlans to launch payments features stalled as advertisers continue to flee Musk's controversies and upstarts like bluesky And threads Threat to X's dominance. Isolation keeps Silicon Valley's latest moonshot away from the messy reality of running a social network.
The platform Musk claims he bought to protect free speech now appears to serve a different purpose entirely: a private testing ground for his AI ambitions. This is an unconventional arrangement. But it seems to fit Musk perfectly.