Elon Musk’s artificial intelligence startup xAI has debuted its updated Grok-3 model, showcasing a version of the chatbot technology to challenge OpenAI days after the billionaire’s unsolicited cash bid to buy the company was rejected. The Grok-3 model boasts of having more than 10 times the compute power of its predecessor and completed pre-training in early January. According to xAI, Grok-3 beats OpenAI’s GPT-4o, Alphabet Inc.’s Google Gemini, DeepSeek’s V3 model, and Anthropic’s Claude across math, science, and coding benchmarks.

The introduction of Grok-3 puts xAI back in the race for leadership in open-source large language models, with the model outperforming the current state-of-the-art models on some benchmarks. xAI also introduced a new smart search engine with Grok-3, called DeepSearch, which is a reasoning chatbot that expresses its process of understanding a query and how it plans its response. The demonstration showed that DeepSearch includes options for research, brainstorming, and data analysis. Musk’s team also said it intends to release a voice-based chatbot, with the billionaire CEO claiming that Grok-3 is “maximally truth-seeking AI, even if that truth is sometimes at odds with what is politically correct”.

The AI industry is witnessing an increasingly bitter rivalry between xAI and OpenAI, with Musk launching xAI in 2023 as an alternative to the ChatGPT maker. Musk has been critical of OpenAI since leaving the board in 2018 and has filed two lawsuits against the company for allegedly straying from its founding principles. The billionaire CEO has also offered to buy OpenAI’s nonprofit arm for $97.4 billion in a bid that was rejected last week. OpenAI Chief Executive Officer Sam Altman classified the bid as a tactic to “slow us down.” xAI is starting a new subscription called SuperGrok for the bot’s mobile app and Grok.com website, and plans to open-source preceding versions of Grok models as soon as the latest one is fully mature.

The Grok-3 model is available to Premium+ subscribers on X, a service that costs $22 a month, compared to $200 a month for full access to OpenAI’s GPT-4o. 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. OpenAI is also in talks to raise as much as $40 billion in a round that would push its valuation to as much as $300 billion. The competition in the AI market is intensifying, with rival technologies emerging that could challenge the existing model and make it easier for new competitors to emerge. 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 future of AI is rapidly evolving, with xAI and OpenAI at the forefront of the industry. As the competition between these two companies continues to heat up, it will be interesting to see how the AI landscape changes in the coming months. With the introduction of Grok-3, xAI is poised to become a major player in the AI market, and its impact on the industry will be closely watched. The company's plans to open-source its AI models and make them more accessible to the public could also have significant implications for the future of AI development. As the AI industry continues to grow and evolve, it will be important to keep a close eye on the developments and advancements being made by xAI and other companies in the field.