Elon Musk's xAI is striving to build a profitable business by selling its Grok AI model to enterprises worldwide. Over the past six months, xAI has assembled a sales team focused on enterprise AI, now numbering over a dozen members.
However, xAI's lack of experience in large-scale enterprise sales has hindered potential partnerships. According to two former xAI employees, while the company has secured clients like Morgan Stanley and Palantir, most engagements remain small-scale tests, generating revenues in the hundreds of thousands to low millions of dollars per deal.
**Key Takeaways** - Grok’s clients include Morgan Stanley and Palantir - Some Tesla employees have switched from Grok to competing AI tools - xAI’s consumer business still outweighs its enterprise segment
One insider noted that many firms interested in Grok already have ties to Musk or his other ventures. For example, Morgan Stanley advised Musk during Twitter’s acquisition (now rebranded as X) in 2022, while Palantir’s major shareholder, Peter Thiel, co-founded PayPal with Musk.
Adam Mansfield of AperEdge Consulting, who negotiates cloud and software deals for enterprises, said none of his clients currently use or seriously consider Grok for business purposes. He explained that executives prefer established vendors like Microsoft over untested providers.
Palantir’s Chief Architect Akshay Krishnaswamy stated via email that the company offers multiple AI models—including xAI, OpenAI, Anthropic, and Google—through its Palantir AI Platform. Internally, Palantir uses Grok for tasks like logistics and recruitment. Krishnaswamy also referenced a May 2024 announcement about a financial services AI collaboration between Palantir, xAI, and investment firm TWG Global.
Morgan Stanley declined to comment. xAI’s automated response to inquiries simply stated, “Legacy media is full of lies.”
**Mounting Pressure** PitchBook data shows xAI has raised $270 billion in debt and equity to fund AI data centers. Meanwhile, rivals OpenAI and Anthropic have made significant enterprise sales progress, each generating billions in revenue. SpaceX has invested $2 billion in xAI, and Tesla is considering an investment.
xAI’s financials remain opaque. Its primary revenue stream comes from X’s ad business, which, despite cost-cutting, remains unprofitable. Bloomberg reported X’s Q3 revenue grew 17% to $752 million but still posted losses.
Former employees revealed that Grok’s consumer subscriptions—offered via a standalone app and integrated into X—are xAI’s largest revenue source outside ads. The $30/month “Grok+” tier includes unlimited access to AI-generated images/videos and virtual “companions” like “Annie,” a 22-year-old blonde character designed for flirtatious interactions. Users can unlock outfits by chatting daily, and the tool’s lax content moderation has made it popular for NSFW content.
OpenAI CEO Sam Altman previously announced plans to allow adult content generation in ChatGPT by December 2024, but The Verge reported this has been delayed to Q1 2026.
**Microsoft Azure’s Role** In September 2024, xAI integrated Grok into Microsoft’s Azure AI Studio, joining models from OpenAI, Anthropic, and DeepSeek. xAI also sells Grok subscriptions on AWS Marketplace for $30/month but has yet to join AWS’s core AI platform, Bedrock. A recent hire from AWS suggests deeper collaboration may be forthcoming.
xAI, like peers, sees the U.S. government as a key client. This summer, it joined other AI labs in securing Defense Department contracts worth up to $200 million each, though the Pentagon’s initial generative AI platform only features Google’s Gemini.
**Internal Hurdles** Musk’s other companies could bolster xAI’s enterprise push, but adoption is uneven. Tesla uses Grok in vehicles and Optimus robots, but some engineers prefer Anthropic’s Claude or Meta’s open-source Llama models. SpaceX employs Grok for Starlink support, but xAI’s non-U.S. citizen workforce—including many Chinese engineers—limits collaboration due to SpaceX’s defense contracting restrictions.