This article first appeared on GuruFocus.
Tesla, Inc. (TSLA, Financials) affiliated startup xAI is facing challenges as it tries to expand its Grok AI models into the enterprise market, according to a report from The Information.The firm has engaged more than a dozen salesmen to help it grow its business, but early talks show that acceptance has been slower than planned. People who may buy xAI’s products told reporters that the company’s main problem is that it doesn’t have a lot of experience working with big companies.
This is particularly true as rivals like Microsoft-backed OpenAI and Google’s corporate AI tools continue to become better. When companies are thinking about using AI, they generally seek for established standards, security guarantees, and long-running case studies. These are areas where younger companies like xAI still have work to do.
The study said that xAI’s team is attempting to decrease that gap, but competition is becoming tougher. Big cloud companies are adding AI features to their platforms, which makes it difficult for independent startups to get businesses to pay attention to them.
People who are interested in the larger AI ecosystem will be watching to see whether xAI can turn its early success, which was mostly due to public interest in Grok’s consumer features, into real business income by 2026.
