Elon Musk claims new Grok-3 model outperforms OpenAI and Google rivals

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 criticised 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 $97.4bn (€93.09bn) in a bid that was rejected last week. OpenAI chief executive 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.

Musk's 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 as Premium+ subscribers on X, a service that costs $22 (€21) a month. That compares to $200 (€190) 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 led AI efforts at Tesla, 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 $10bn (€9.56bn) in a funding round that would value the company at roughly $75bn (€71bn), Bloomberg reported last week. The company was last valued at about $51bn (€48.7bn), according to data compiled by PitchBook.

OpenAI is in talks to raise as much as $40bn (€38bn) in a round that would push its valuation to as much as $300bn (€286bn).

These businesses are also capital-intensive. SoftBank, OpenAI, Oracle,  and Abu Dhabi-backed MGX jointly announced a programme in January to deploy $100bn, with the goal of eventually spending $500bn, for the construction of data centers and other infrastructure for AI in the US. Dell is at an advanced stage of securing a deal worth more than $5bn to provide xAI with servers optimised 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.