Musk's xAI Shifts From AI Rivalry to Compute Rental After Grok Stumbles

After years of positioning xAI as a challenger to OpenAI and Anthropic, Elon Musk has embraced a dramatically different strategy: renting excess AI computing power to the very rivals he initially set out to beat. Initially skeptical of the cloud business model, Musk ultimately folded xAI into SpaceX in May 2026 and pivoted the combined entity—now called SpaceXAI—toward infrastructure monetization as the core business line.