Elon Musk and xAI: The Story Behind the World's Most Divisive AI Company

A note before we start: I've done my best to research and verify the information in this piece, drawing on publicly available sources including Britannica, Forbes, PBS and multiple technology publications. As with any profile of this kind, details can vary between sources or change over time. I'd encourage you to follow the links and read the primary sources for yourself. Elon Musk is one of the most written-about and contested figures in the world - I've tried to stick to what is verifiable rather than what is opinionated. You can form your own view.

Few people in the AI space generate stronger reactions than Elon Musk. Depending on who you ask, he is either a visionary who helped build the foundations of modern AI or a disruptive force whose motivations are impossible to separate from his ego and his politics. Probably both things contain some truth.

This piece is not here to settle that debate. It is here to tell the story of how someone who helped create OpenAI ended up building a rival AI company and what that company - xAI - has become. Because like it or not, xAI and its chatbot Grok are now serious players in the space many of us operate in every day.

Who is Elon Musk?

Born in Pretoria, South Africa in 1971, Musk moved to North America in his twenties and built his early wealth through Zip2 and PayPal. He then founded SpaceX in 2002 and became a major early investor and later CEO of Tesla. By the time he turned his attention to AI, he was already one of the most powerful figures in technology.

According to Britannica, Musk co-founded OpenAI in 2015 alongside Sam Altman and others, motivated in part by concern that Google was gaining too much control over the direction of artificial intelligence. He was an early funder and board member. Three years later, in 2018, he departed - officially citing a conflict of interest with Tesla, though subsequent reporting suggested he had sought to take control of OpenAI or merge it with Tesla and been refused.

What followed was a public and acrimonious fallout. Musk became one of OpenAI's most vocal critics, accusing the company of abandoning its original non-profit mission in pursuit of commercial profit. In 2024 he filed a lawsuit against OpenAI and Sam Altman. In February 2025, he made a $97.4 billion bid to acquire OpenAI outright. The board turned it down.

In the middle of all of this, he built something of his own.

What is xAI?

xAI was founded on 9 March 2023, with a public announcement following in July of that year. Musk recruited a team of around twelve researchers from Google, DeepMind, Microsoft, OpenAI and Tesla. The stated mission was to build AI that is "maximally truth-seeking" - a deliberate contrast to what Musk described as the over-moderation and political correctness of existing models.

The company's flagship product is Grok, an AI chatbot integrated with X - the social media platform formerly known as Twitter, which Musk acquired in 2022. Grok launched in beta in November 2023 and was made available to all X users by December of that year.

Two things distinguish Grok from its competitors. First, it has real-time access to data from X, giving it up-to-date awareness of current events that models trained on static datasets lack. Second, it was deliberately designed to engage with questions other AI systems typically decline - the "spicy" queries, as xAI described them. Whether that is a feature or a bug depends significantly on your point of view.

The growth of xAI

xAI has moved fast. Grok 1.5 arrived in March 2024 with significantly improved reasoning. Grok 2 followed in August 2024, adding image generation. Grok 3 launched in February 2025, trained on xAI's Colossus supercomputer in Memphis, Tennessee - a cluster of around 200,000 Nvidia GPUs that Musk claimed was the world's most powerful AI training system.

In March 2025, xAI acquired X in an all-stock deal, formally merging the social network into the AI company. In February 2026, xAI was itself merged into SpaceX, with the combined entity valued at approximately $1.25 trillion.

According to Forbes, as reported by Techi, Musk's personal net worth is estimated at over $800 billion as of early 2026 - the largest individual fortune ever recorded. The bulk of it is tied to SpaceX, xAI and Tesla.

The controversies

Grok has not been without problems. In July 2025 PBS News reported that Grok had produced posts praising Adolf Hitler, which xAI subsequently deleted. The chatbot has been criticised for generating misinformation about elections, producing explicit images of public figures and children, and for appearing to shift its political positions in response to Musk's own views.

These are not small criticisms and they are worth naming plainly. xAI has made adjustments following various incidents. Whether those adjustments represent genuine course correction or surface-level fixes is, again, something you can judge for yourself.

Why it matters for founders

The reason xAI belongs in this conversation is not because of Musk's net worth or his public persona. It is because Grok is now a genuinely competitive AI model that many founders are using or considering using.

Grok 4, released in July 2025, has shown strong performance across benchmarks in reasoning, mathematics and coding. Its real-time access to X data is a genuine differentiator for anyone working with current events, social signals or market sentiment. And for founders already on X, the integration is frictionless.

The broader point is this: the AI space is not a two-horse race between Anthropic and OpenAI. xAI is in it. And whatever you think of the person who built it, ignoring the product would be a mistake.

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