But as the company touts performance benchmarks and development timelines, Grok is also struggling to outrun issues over its behaviour on X, the social media platform now absorbed into the xAI ecosystem.

Two versions of the new model were unveiled on Wednesday: Grok 4 and its more powerful counterpart, Grok 4 Heavy, described by Musk as a “multi-agent” system capable of collaborative problem-solving. “They all compare their work like a study group,” he said during a livestream. xAI says this architecture gives Grok 4 Heavy a major edge in performance, especially on complex tasks.

According to internal tests and third-party assessments, Grok 4 is outperforming other platforms in the space across several key benchmarks. It scored 25.4% on Humanity’s Last Exam—an advanced reasoning test—without tools, surpassing OpenAI’s o3 model (21%) and Google’s Gemini 2.5 Pro (21.6%). 

With tools enabled, Grok 4 Heavy jumped to 44.4%, far ahead of Gemini’s 26.9%. On the ARC-AGI-2 test, which involves visual reasoning, Grok scored 16.2%, almost twice as high as Claude Opus 4. Independent reviewers at Artificial Analysis gave Grok 4 an Intelligence Index score of 73, ahead of all major competitors.

Those who subscribe to the SuperGrok Heavy plan will gain early access to Grok 4 Heavy and a slate of upcoming tools, an AI coding assistant in August, a multimodal agent in September, and a video generation model in October. 

Subscribers also get enhanced usage limits and priority support. It shows that xAI is targeting high-end users and developers eager for bleeding-edge capabilities.

Yet while xAI celebrates its progress, its public image is still weak. Just days before Grok 4’s release, the automated Grok account on X posted antisemitic messages, including content praising Adolf Hitler and criticising “Jewish executives” in Hollywood. 

The company responded by limiting the account and deleting the posts. xAI also quietly removed a controversial part of Grok’s system prompt that encouraged “politically incorrect” replies, a change interpreted as an attempt to tone down the model’s unpredictability.

Regulators have already begun paying attention. Turkey and Poland are reportedly considering bans, leading to questions about Grok’s compliance with international content moderation laws. Musk, for his part, deflected responsibility. “Grok was too eager to please,” he said, portraying the outburst as a technical issue, not a moral or safety failure.

Adding to the issue, Linda Yaccarino resigned as CEO of X just hours before the Grok announcement. Her departure after two years leaves a leadership vacuum at a time when xAI is betting heavily on X integration to scale Grok’s usage. The timing, paired with growing international backlash, has added a layer of instability to an already tense rollout.

Despite this, xAI is pressing ahead. It plans to release Grok 4 via API to encourage developer adoption and is in talks with hyperscalers, including Oracle and Microsoft, to bring Grok to enterprise cloud platforms. 

Just two months into launching its enterprise division, xAI also secured a $300 million deal with Telegram, which will integrate Grok into the messaging platform. Telegram will receive 50% of all subscription revenue generated through its app.

Morgan Stanley, which led the deal, confirmed on Monday that xAI had closed a $5 billion debt financing round made up of secured notes and term loans. 

The deal, according to the bank, was oversubscribed and attracted major institutional investors across the globe.

Simultaneously, xAI closed a separate $5 billion strategic equity investment. Though the identities of the backers have not been disclosed, Bloomberg previously reported that the startup had been negotiating a $4.3 billion equity round with investors. 

That conversation is part of a larger funding goal, Musk’s team is reportedly looking to raise as much as $20 billion in equity that could push the company’s valuation beyond $120 billion. Some insiders are even betting on a $200 billion ceiling.

The funds are earmarked for aggressive expansion. A key priority is scaling up computing infrastructure through data centres tailored to handle vast AI workloads. 

The capital will also accelerate development of Grok, xAI’s core conversational platform integrated into X (formerly Twitter), and help the company move toward building its own custom chips, codenamed “Gigafab”, to reduce dependence on Nvidia’s high-demand GPUs.

Musk launched xAI in 2023 after parting ways with OpenAI, the company he co-founded. He has positioned xAI as a rival not just to OpenAI, but also to players like Google DeepMind and Anthropic. 

His approach is more unorthodox, Grok is marketed as a “rebellious” chatbot, an alternative to the more filtered responses seen in other models.

The debt raise and equity injection together represent one of the largest combined funding moves by a private tech startup in recent memory. 

It comes as global competition increases. OpenAI has a $51 billion partnership with Microsoft, while Amazon has poured $4 billion into Anthropic. These alliances are about access to compute power, chips, and distribution.

“The deal was oversubscribed and included prominent global debt investors,” Morgan Stanley stated in a post on X.

Musk has previously argued that building AGI, artificial general intelligence, requires vertical control over data, chips, energy, and distribution. This latest funding round gives xAI the firepower to attempt just that.

xAI has not issued a formal statement regarding the funding, and representatives did not respond to requests for comment at the time of filing. 

But then, we see that Musk is going all-in on building a scalable AI ecosystem, and investors, despite earlier doubts, are willing to put serious money behind it.