Musk's xAI unveils Grok-3 AI chatbot to rival ChatGPT, China's DeepSeek

(Reuters) - Elon Musk's artificial intelligence startup xAI has introduced Grok-3, the latest iteration of its chatbot, as it looks to compete with Chinese AI firm DeepSeek, Microsoft-backed OpenAI, and Alphabet's Google.

Grok-3 debut comes at a critical moment in the AI arms race, just days after DeepSeek unveiled its powerful open-source model and as Musk moves aggressively to expand xAI's influence.

The chatbot is being rolled out immediately to Premium+ subscribers on X, the social media platform owned by Musk. xAI is also launching a new subscription tier, SuperGrok, for users accessing the chatbot via its mobile app and Grok.com website.

"Grok-3 across the board is in a league of its own," Musk said during a livestream alongside three xAI engineers late on Monday, adding the model outperforms its predecessor, Grok-2.

"The introduction of Grok-3 puts xAI back in the race for leadership in open-source LLMs. It outperforms the current state-of-the-art models on some benchmarks, which makes xAI relevant again" said Gil Luria, managing director at D.A. Davidson.

As competition in AI intensifies, xAI is ramping up its data center capacity to train more advanced models, by raising billions of dollars. Its supercomputer cluster in Memphis, Tennessee, called "Colossus", is touted as the largest in the world.

However, Luria said improvements over the Grok-2 model appear to be too small to justify the enormous resources used to train it.

The latest release introduces a smart search engine, called DeepSearch, which xAI describes as a reasoning-based chatbot capable of articulating its thought process when responding to user queries.

The tool, demonstrated during the livestream, offers functions for research, brainstorming, and data analysis.

Last week, a consortium of investors led by Musk offered$97.4 billion to acquire OpenAI's nonprofit assets, an offer the ChatGPT-maker rejected.

(Reporting by Surbhi Misra and Priyanka.G in Bengaluru; Editing by Arun Koyyur)

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