Grok 3 Just Shook up the AI Game
At this point, DeepSeek is old news. xAI's Grok 3 is a major leap in AI in 3 core categories. Andy and Landon covered this in DEPTH on today's Founder's Call. Here's what we know about Elon Musk's thinking and some pin action stocks to watch.
Megan Brantley
February 20, 2025
Elon Musk caught our attention this week – this time, because of a major Grok update.
Andy and Landon broke this down in detail on today’s Founder’s Call (you should watch this — it’s very compelling).
xAI’s Grok 3 marks a significant leap in AI capabilities, leveraging 10x more computing power than its predecessor through xAI’s Colossus supercluster.
Early benchmarks suggest superior performance in reasoning, mathematics, and coding compared to competitors like OpenAI’s GPT-4o and DeepSeek V3.
New features include "Think" mode, which provides step-by-step logical reasoning, and "Big Brain" mode, designed for complex tasks requiring additional computation. To drive adoption, xAI has temporarily made Grok 3 free for all users, expanding beyond its initial X Premium+ ($40/month) exclusivity.
In addition to Grok 3, xAI introduced Deep Search, an AI-powered tool for enhanced query understanding and summarization, directly competing with existing research AI tools. The release underscores Musk’s strategy of aggressive iteration and real-time data integration via X (formerly Twitter), positioning xAI as a high-velocity competitor against OpenAI, Google DeepMind, and Anthropic.
This update really reveals one of Musk’s core beliefs:
AI dominance will be determined not by static performance, but by the speed at which models improve.
xAI’s Competitive Strategy vs. OpenAI, Google, and Others
xAI differentiates itself through integration with X (formerly Twitter), open-source AI development, and a focus on improving learning speed over static benchmarks. Unlike OpenAI and Google, which operate as standalone AI platforms, Grok is embedded into X, providing real-time access to social media data and securing a built-in distribution channel through X Premium subscribers.
Musk’s approach embraces an open-source philosophy, recently making Grok’s models publicly available. This strategy mirrors Meta’s LLaMA and contrasts with OpenAI’s closed system, allowing for rapid iteration and improvements. Musk also argues that the most important factor in AI competition is how fast models improve over time rather than how they perform today.
This focus on acceleration over absolute benchmarks is key to xAI’s positioning.
Competitive Positioning Against Rivals
Competitor | Strengths | Weaknesses Relative to xAI | xAI’s Advantage |
OpenAI (GPT-4o) | Leading general intelligence, enterprise adoption, Microsoft partnership | Closed ecosystem, slower iteration cycles | Open-source approach, faster iteration |
Google DeepMind (Gemini) | Integration with Google Search, YouTube; strong multimodal capabilities | Slower releases, Gemini underperformance | Real-time data access from X |
Anthropic (Claude) | Focus on alignment and safety; strong enterprise appeal | Slower innovation pace, limited consumer focus | Emphasis on rapid AI improvement |
Meta (LLaMA) | Open-source model adoption, AI-driven ad targeting | Competing directly with Grok, enterprise AI focus | Potential synergies in open-source AI |
Given xAI’s focus on scaling AI capabilities, open-source development, and real-time social media integration, several public companies could see direct and indirect benefits.
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