American artificial-intelligence laboratory founded by Elon Musk. Its main model is called Grok. Musk launched Grok just months after signing an open letter calling for a moratorium on such work and after calling for urgent rules to govern the development of superintelligence.
The Future of Life Institute rated xAI, along with DeepSeek, at the bottom of its report card for AI safety, noting that neither had made public any meaningful effort to assess whether their models pose large-scale risks.
In July 2025 xAI released an AI companion designed for erotic role-play and a $300-a-month subscription model that searches for Musk's tweets when asked its opinion on contentious topics. Musk has said xAI is working on "Baby Grok", a dedicated chatbot for children.
On July 14th 2025 the Pentagon awarded contracts worth up to $200m each to Anthropic, Google, OpenAI and xAI to experiment with "agentic" AI models for military applications. In late February 2026 the Pentagon gave xAI authorisation to handle classified military data, making it the second AI lab (after Anthropic) to gain such clearance. Grok is widely considered buggier and less reliable than Anthropic's Claude. SpaceX and xAI are said to be competing together in a Pentagon contest to build voice-activated drone-swarming technology.
xAI raised $5bn of debt in early 2025 and was reportedly borrowing a further $12bn to buy chips. Nvidia is providing some of the $20bn being raised by xAI. When SoftBank's financing of its partnership with OpenAI was announced in January, Musk wrote: "They don't actually have the money."
In early January 2026 xAI completed a $20bn fundraising round. Adjacent to it, xAI leased $5.4bn-worth of Nvidia GPUs from a special-purpose vehicle set up by Valor Equity Partners, its long-standing backer.
On February 2nd 2026 Musk announced a merger of xAI with SpaceX, valuing the new entity at $1.25trn. SpaceX investors are entitled to 80%, with the remainder going to xAI's owners. The merger saddles SpaceX, a money-spinning space champion, with a loss-making AI laggard. xAI made on the order of $500m in revenue from Grok in 2025; OpenAI, maker of ChatGPT, brought in about $13bn. X, the social-media platform with which xAI merged in 2025, added perhaps $3bn in sales. Even so, the combined business was reportedly bleeding cash at the rate of about $1bn a month as it invested vast sums in data centres.
The merger with X left xAI with around $12bn of borrowings remaining from Musk's purchase of the social network. With Valor Equity Partners, xAI also set up an off-balance-sheet vehicle financed by around $3.5bn of debt to buy AI chips. SpaceX, for its part, is on the hook to cover $2bn of interest owed by EchoStar as part of a deal to acquire mobile spectrum.
X is under investigation in the European Union and Britain over potential breaches of data regulations and for its launch over Christmas 2025 of an image generator widely used to produce nude deepfakes. On February 3rd 2026 X's offices in Paris were raided by French authorities. If courts find X has breached EU rules, the EU could fine it up to 6% of its global revenue; Britain could fine it up to 10%.
In 2024 xAI built a large GPU cluster in Tennessee in a record four months by trucking in gas turbines and engines rather than connecting to the electricity grid—a model SemiAnalysis, a research firm, dubbed "BYO" (bring-your-own) energy. With grid connections now taking as long as five years, the approach has been widely imitated. Goldman Sachs estimates that up to a third (25GW) of incremental data-centre capacity will be built off-grid in America over the next five years.
History teaches us that men and nations behave wisely once they have exhausted all other alternatives.