Musk challenges OpenAI, SpaceX invests $2 billion in xAI

Elon Musk is relaunching his challenge to OpenAI and investing $2 billion from SpaceX in his artificial intelligence company xAI, nearly half of the recent capital raising by chatbot maker Grok. The Wall Street Journal reported, although Musk has so far been evasive. In response to a post on X about the possibility of Tesla investing in xAI, the billionaire replied that "that would be great, but subject to board and shareholder approval," without confirming or denying the WSJ's report on SpaceX's investment plans. Musk has repeatedly mobilized his business empire to boost the artificial intelligence startup, attempting to catch up with OpenAI, the company he helped found in 2015 before parting ways.

Earlier this year, it merged xAI with X, combining what was a small research lab with a social media platform that helps amplify the reach of its Grok chatbot. The merger valued the new company at $113 billion.

SpaceX's investment is part of xAI's $5 billion capital raising announced by Morgan Stanley last month. It's the rocket manufacturer's first known investment in xAI and one of its largest in another company. Since leaving his role in the Trump administration, challenging him with the creation of a third party (America Party), Musk has focused on training the latest version of Grok. The richest man on the planet has called it "the world's smartest AI," although the chatbot it powers hasn't achieved the same success as OpenAI's ChatGPT.

Grok recently posted racist and controversial comments in response to X users, including a praise of Hitler. xAI apologized "deeply for the horrific behavior many have experienced," adding that it investigated and took action to address the issue.

Grok already powers the customer support capabilities for SpaceX's Starlink satellite internet service. Musk representatives have said that further commercial partnerships between SpaceX and xAI are likely in the future. During the launch of Grok 4 this week, Musk said he also plans to integrate Grok into humanoid robots, such as Tesla's Optimus fleet.

SpaceX's investment in xAI, according to the WSJ, could pose a risk to Musk's space company. SpaceX's revenue has soared in recent years, but the company is investing billions to develop a new rocket. The experimental vehicle is behind schedule and has suffered several setbacks this year, including three consecutive in-flight failures and a serious explosion during an engine test last month.