As Grok flounders, SpaceX bets future on beating Big Tech at AI

Source: Ars Technica

Corporate Adoption of AI Models

Corporate use of Anthropic’s Claude and the Google Gemini AI models has also surged in the past year, according to market research firm Enterprise Technology Research. Their survey of 500 people—highlighted by The Wall Street Journal—showed Claude usage among respondents’ companies jump from 21 % to 48 % between 2025 and 2026. Reported Gemini usage rose from 27 % to 40 % in the same period.

Grok’s corporate usage also saw a smaller increase, rising from 4 % to 7 %. “We have launched Grok Business, Grok Enterprise, Grok API, and xAI Gov, products that we believe will be attractive to enterprises and governments, and we expect substantial opportunities to acquire new customers,” SpaceX wrote in its S‑1 filing.

Grok’s Performance and Issues

Reuters reported that “xAI’s Grok chatbot has been a flop with one of the world’s largest customers—the US government.” An examination of AI inventory records from federal agencies in 2025 showed only three public mentions of using either xAI or Grok out of more than 400 publicly disclosed examples of AI use by the government.

The peak of Grok’s download popularity coincided with a January 2026 update that allowed users to generate millions of sexualized images of women and children by using real photos to virtually undress people—a situation that persisted for weeks before developers addressed it. The AI nudifying scandal led to lawsuits against xAI and spurred the European Union to ban nudifying apps.

Grok also still incorporates “Spicy” and “Unhinged” modes. The SpaceX financial disclosure described those features as presenting “heightened risks, including reputational harm, the generation of potentially explicit content and misinformation or deceptive outputs, potential non‑consensual or exploitative imagery, intellectual property infringement, or content that could be viewed as exploitative, harmful, harassing, abusive, or discriminatory.”

Regulatory and Legal Concerns

From a business standpoint, SpaceX acknowledged that these issues leave the company open to “the risk of regulatory scrutiny, enforcement actions, litigation, or claims of harm, as well as reputational damage, user or advertiser backlash, or limitations on our ability to distribute or monetize our products in certain jurisdictions or through certain partners.”