Elon Musk’s xAI unveils Grok-3, taking on AI giants

The AI industry is witnessing substantial financial investment, with xAI and OpenAI pursuing significant fundraising efforts. Emerging competitors, such as China’s DeepSeek, with cost-efficient models, indicate potential disruptions in the sector.
xAI’s Grok now supports real-time document and app creation with Grok Studio, available to all users instead of being limited to premium tiers.

Elon Musk’s AI startup, xAI, has unveiled its latest AI model, Grok-3, which the billionaire claims is the most advanced chatbot technology. In a live-streamed presentation, Musk and his engineers demonstrated how Grok-3 outperforms competitors, including OpenAI’s GPT-4o and Google’s Gemini, across math, science, and coding benchmarks. With over ten times the computational power of its predecessor, Grok-3 completed pre-training in early January and is now continuously evolving, Musk said, promising visible improvements within just 24 hours.

A key innovation introduced with Grok-3 is DeepSearch, an advanced reasoning chatbot designed to enhance search capabilities by providing transparent explanations of how it processes queries. The feature allows users to engage in research, brainstorming, and data analysis more deeply and clearly. The model is being rolled out immediately to X’s Premium+ subscribers, with an upcoming SuperGrok subscription planned for mobile and web platforms.

The launch marks another escalation in the rivalry between Musk’s xAI and OpenAI, the company he co-founded but later distanced himself from. Musk has been openly critical of OpenAI’s shift toward a for-profit model and recently filed lawsuits against the organisation, accusing it of betraying its founding principles. His bid to acquire OpenAI’s nonprofit arm for $97.4 billion was rejected last week, with OpenAI’s CEO, Sam Altman, dismissing the offer as an attempt to hinder the company’s progress.

Why does it matter?

The AI sector is experiencing an unprecedented investment boom, with xAI reportedly seeking to raise $10 billion in new funding, potentially pushing its valuation to $75 billion. Meanwhile, OpenAI is in talks to raise as much as $40 billion, which could boost its valuation to an astonishing $300 billion. These soaring numbers highlight the capital-intensive nature of AI development, with global tech giants and investment groups pouring billions into the race to dominate AI.

However, new challenges are emerging. Last month, Chinese AI firm DeepSeek introduced R1, an open-source model that matched or surpassed leading American AI systems on key industry benchmarks. The company claims it developed R1 at a fraction of the cost incurred by its US counterparts, suggesting that the dominance of firms like OpenAI and xAI could face disruption from more cost-efficient alternatives shortly.