Elon Musk launches Grok 3: Can xAI’s chatbot challenge OpenAI and DeepSeek?

Elon Musk’s artificial intelligence startup, xAI, has unveiled Grok 3 AI, the latest iteration of its chatbot technology.

The new model, which Musk has described as the “smartest AI on Earth,” is being positioned as a direct competitor to OpenAI, Google’s Gemini, Anthropic’s Claude, and Chinese firm DeepSeek’s AI models.

With enhanced compute power exceeding its predecessor by over tenfold, Grok-3 aims to cement Musk’s ambitions in the AI arms race.

The model, which completed pre-training in early January, is rolling out to Premium+ subscribers on X and will soon be accessible through a new “SuperGrok” subscription for mobile and web users.

The unveiling of Grok-3 AI is about more than just a product upgrade—it represents Musk’s broader challenge to OpenAI’s dominance.

As xAI pursues a $10 billion funding round that could value the company at $75 billion, its ability to disrupt the AI market will depend not just on the model’s technical superiority but also on Musk’s ability to navigate regulatory scrutiny and intense competition from US and Chinese AI powerhouses.

Grok-3 vs OpenAI and DeepSeek

Grok-3’s launch signals xAI’s most ambitious move yet to challenge the world’s leading AI companies.

According to Musk, Grok AI has outperformed major rivals across math, science, and coding benchmarks, surpassing OpenAI’s GPT-4o, Google’s Gemini, and DeepSeek’s latest V3 model.

Independent evaluations of Grok-3’s capabilities remain scarce, and AI experts suggest that real-world performance tests will be key in determining whether Musk’s claims hold weight.

One of Grok 3’s standout features is DeepSearch, a smart search engine designed to improve reasoning and response quality by outlining its thought process before delivering an answer.

This positions Grok AI as a potential alternative to traditional search engines by offering more transparent and structured answers.

xAI announced plans to release a voice-based chatbot “as soon as possible,” indicating a push into multi-modal AI applications.

Early reviews of Grok 3 have been mixed. Andrej Karpathy, an AI researcher and former OpenAI co-founder, noted that while Grok 3 Live appears to be “state of the art” in certain areas, it still struggles with factual accuracy and reasoning.

The model’s ability to handle nuanced and complex queries will likely determine its long-term viability as a true OpenAI rival.

Musk’s battle with OpenAI

Beyond technical competition, Grok-3’s launch comes amid Musk’s escalating legal battle with OpenAI. Musk, who co-founded OpenAI in 2015 but left the board in 2018, has become a vocal critic of the company, accusing it of abandoning its nonprofit origins in favour of profit-driven motives.

Earlier this year, Musk sued OpenAI, alleging that the company violated its original mission by prioritising corporate interests over public benefit.

His legal team also filed a $97.4 billion bid to acquire OpenAI’s nonprofit arm—a move that was swiftly rejected by OpenAI CEO Sam Altman, who dismissed it as an attempt to “slow us down.”

Musk’s ongoing feud with OpenAI underscores the broader ideological divide in the AI industry—between companies that prioritise open-source AI models and those that focus on highly proprietary, closed systems.

Musk has indicated that xAI will eventually open-source earlier Grok models once Grok-3 AI reaches maturity.

This could create new opportunities for developers, but also raise concerns over data security and misuse.

xAI’s funding and competition

Musk’s ambitions for Grok 3 AI extend beyond chatbot applications—his long-term goal is to position xAI as a key player in the AI infrastructure market.

xAI is currently in talks to secure a $10 billion funding round, while OpenAI is negotiating a potential $40 billion raise that would push its valuation to nearly $300 billion.

Meanwhile, global AI investment is skyrocketing, with firms such as SoftBank, Oracle, and MGX committing up to $500 billion in AI infrastructure spending over the next decade.

Reports suggest that Dell Technologies is finalising a $5 billion deal to provide Musk’s xAI with AI-optimised servers, a crucial step in scaling Grok AI to compete with OpenAI and DeepSeek.

Competition is growing fast. Chinese AI giant DeepSeek recently released its R1 model, an open-source alternative that matches or surpasses leading US AI models on industry benchmarks.

Unlike Musk’s compute-heavy approach, DeepSeek has focused on cost-efficient AI training, raising questions about whether Grok-3 AI’s model is sustainable in the long run.

While xAI’s Grok 3 Live rollout is an important milestone, its ability to disrupt the AI market will depend on more than just technical advancements.

Regulatory scrutiny, investor confidence, and real-world adoption will determine whether Elon Musk’s AI Grok 3 can carve out a meaningful foothold in the highly competitive space dominated by OpenAI and DeepSeek.

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