Elon Musk’s artificial intelligence start-up, xAI, has showed off its updated Grok-3 model, showcasing a version of the chatbot technology that the billionaire has said is the “smartest AI on Earth”.

Across maths, science and coding benchmarks, Grok-3 beats Google Gemini, DeepSeek’s V3 model, Anthropic’s Claude and OpenAI’s GPT-4o, the company said via a livestream on Monday. Grok-3 has “more than 10 times” the compute power of its predecessor and completed pre-training in early January, Musk said in a presentation alongside three of xAI’s engineers.

“We’re continually improving the models every day, and literally within 24 hours you’ll see improvements,” Musk said.

The company 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.

Grok-3 is rolling out to Premium+ subscribers on X immediately. The company is starting a new subscription called SuperGrok for the Grok mobile app and Grok.com website.

The new chatbot appears to put Grok ahead of OpenAI’s latest ChatGPT and ramps up an increasingly bitter rivalry between the two companies. Musk launched xAI in 2023 as an alternative to OpenAI, which he’s publicly criticised for its plans to restructure as a for-profit business.

Lawsuits

The billionaire filed two lawsuits against OpenAI for allegedly straying from its founding principles and offered to buy OpenAI’s nonprofit arm for US$97.4-billion in a bid that was rejected last week. OpenAI CEO 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.

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 $10-billion in a funding round that would value the company at roughly $75-billion. The company was last valued at about $51-billion, according to data compiled by PitchBook.

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OpenAI is in talks to raise as much as $40-billion in a round that would push its valuation to up to $300-billion.

These businesses are also capital intensive. SoftBank Group, OpenAI, Oracle and Abu Dhabi-backed MGX jointly announced a programme in January to deploy $100-billion, with the goal of eventually spending $500-billion, for the construction of data centres and other infrastructure for AI in the US. Dell Technologies is at an advanced stage of securing a deal worth more than $5-billion 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. — Amy Thomson, with Saritha Rai, (c) 2025 Bloomberg LP

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