Elon Musk is ramping up efforts to compete with AI giants Anthropic and OpenAI.
Musk’s AI startup, xAI, has held discussions in recent weeks with Mistral and AI coding startup Cursor about a potential three-way partnership, people familiar with the matter said. Mistral is a French AI startup that was founded in 2023 and has positioned itself as an independent alternative to US frontier labs.
SpaceX, which owns xAI, announced a deal this week with Cursor that gives SpaceX the option to buy the French company for $60 billion. Business Insider reported last week that Cursor was training its AI model on xAI’s infrastructure.
Musk is pushing xAI into more partnerships to try to catch Anthropic and OpenAI, which have lately jumped ahead in AI coding services and AI agents.
Musk has floated the idea of closer AI collaboration with Mistral and Cursor to take on rivals like Anthropic, insiders told Business Insider. Mistral cofounder Devendra Chaplot joined xAI last month, after a stint at AI startup Thinking Machines Lab. He currently leads pretraining at xAI.
Representatives for xAI, Cursor, and Mistral didn’t immediately respond to requests for comment.
Musk’s AI company, which launched its Grok chatbot in 2023, has been working to scale its infrastructure and improve model performance. It has rapidly established one of the largest data center footprints in the AI race. Last year, xAI said it had around 200,000 Nvidia graphic processing units, and Musk has said it plans to expand to 1 million GPUs.
Musk has made several changes to xAI’s leadership ranks over the past few months. Since late last year, he has repeatedly expressed concerns to engineers about Anthropic’s lead in the AI race, people familiar with the matter said. Michael Nicolls, a SpaceX executive and xAI’s president, said earlier this month that the company is “clearly behind” its competitors and needs to take action to catch up.
Musk has slammed Anthropic in public, describing its AI models as “misanthropic and evil.” Anthropic has emerged over the past year as a leading competitor in the AI race, particularly when it comes to AI coding tools. Anthropic in January blocked xAI from accessing its Claude AI models through the Cursor coding tool.
Musk, who helped found OpenAI in 2015, is also in the process of suing OpenAI, accusing the company of straying from its original nonprofit mission. Musk has positioned xAI as an alternative to what he calls “woke” AI.
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