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Something interesting happened 
the other day. 

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I was looking through our stats 
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subscribed and I really do 
appreciate your support for the 

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other 55% of you are awesome. 
But I'm going to ask you for a 

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favor. 
Could you please hit the 

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It'll take you one second. 

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I'm going to promise you 10 
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No pay walls. 
I'm not going to charge you 

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anything ever, but I'm going to 
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hit the subscribe button right 
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tremendously. 
Thank you so much. 

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Elon Musk's XAI has spent the 
last six months building an 

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enterprise sales team to pitch 
Grok to major corporations. 

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Now that team now exceeds a 
dozen people, and I honestly did

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not see that move coming this 
fast. 

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I knew they're going after 
enterprise, but I didn't know 

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it's going to be so soon now. 
The company was founded in 2023 

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and now it is trying to compete 
with Open AI and Anthropic for 

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business contracts worth 
billions. 

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Problem is that XAI has no track
record in enterprise sales. 

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Companies evaluating AI tools 
want reliability, integration, 

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support and long term 
partnerships. 

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Now those are areas where XAI is
still figuring those things out.

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So what happens when a start 
evaluated at $113 billion tries 

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to sell to Fortune 500 companies
without a single proven 

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deployment? 
Now there are several things 

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that we have to take into 
account. 

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Inexperience, controversial 
outputs, misinformation, 

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incidents, and a burn rate of 
roughly a billion dollars per 

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month. 
Now we're going to cover what 

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Xai is pitching, what Grok 
actually performs well, why 

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corporations are hesitant, and 
what all of this means for the 

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AI enterprise market. 
And we'll get right into that 

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after this very short break. 
Now, XAI is trying to turn Grok 

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into a revenue engine. 
The company raised $22 billion 

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and reached a valuation of $113 
billion. 

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Revenue projections set around a
billion dollars this year. 

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Compare that to Open AI, which 
is expected to bring in roughly 

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$15 billion. 
The gap is pretty big. 

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Grok holds about 2.5% of the AI 
market right now, and enterprise

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customers do not buy based on 
the hype. 

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They want robust APIs, 
compliance with data privacy 

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regulations, and proven 
scalability. 

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Those are the basics. 
XAI is racing to develop them, 

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but rivals have years of 
experience on that now. 

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Open AI has widespread adoption,
too. 

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Anthropic has multiple 
competitive models with 

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established integrations. 
XAI has Musk's name and a 

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chatbot that performs well in 
certain benchmarks but hasn't 

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really proven itself in 
corporate environments. 

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But Grok does have real 
technical strengths. 

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The latest version, Grok 4.20, 
outperformed competitors in a 

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stock trading simulation, 
achieving a 47% return on NASDAQ

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investments. 
That kind of performance is 

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quantitative. 
Tasks could matter in finance. 

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Hedge funds and banks need tools
that can analyze markets and 

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execute strategies, And if Grok 
can deliver consistent results 

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in that domain, it opens up one 
door. 

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But that door could be closed 
very fast. 

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Grok has had multiple public 
stumbles during the Bondi Beach 

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shooting in Australia. 
The chat box spread 

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misinformation about the 
attacker's identity. 

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Then it corrected itself. 
Now that kind of error destroys 

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trust for business critical 
applications. 

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Enterprisers cannot afford an AI
tool that gets facts wrong 

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during breaking events. 
Now, there was another incident 

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that made headlines. 
In a hypothetical scenario, Grok

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was asked whether it would run 
over a group of children to save

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Elon Musk. 
Grok said of course, yes, it 

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would. 
Now, that output was insane, and

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it raised eyebrows among 
corporate buyers who care about 

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brand safety. 
Conservative Fortune 500 

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companies do what? 
Not want an AI that generates 

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that kind of content. 
Even as a thought experiment, XA

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is burn rate adds pressure. 
Billion dollars per month the 

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company is spending faster than 
its earning. 

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The funding runway is 
substantial, over 40 billion 

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raised in total. 
But investors expect returns in 

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the future. 
Now, without meaningful 

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enterprise penetration, XAI 
risks becoming a high valuation 

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company with limited commercial 
traction. 

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Now, XAI announced a partnership
with Saudi Arabia and a company 

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called Humane to integrate Grok 
into regional AI initiatives. 

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That deal could serve as a 
proving ground for XAI Now, if 

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they can demonstrate reliable 
deployments in markets with 

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fewer regulatory hurdles. 
That builds case studies for 

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pitching to other countries like
the United States. 

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Now Musk's bigger ecosystem 
offers another angle. 

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Grock is now embedded in Tesla 
navigation systems, providing 

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real time AI assistance for 
drivers. 

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That integration gives XAI a 
unique distribution channel, but

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also raises questions about data
privacy and cross company 

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dependencies. 
Businesses outside Musk's orbit 

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may not want their AI stack tied
to Tesla or X. 

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So what's going on? 
The enterprise AI market rewards

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vendors with proven scalability 
and support ecosystems. 

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XAI has neither of those quite 
yet and has a sales team, and 

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it's pitching Grok's reasoning 
capabilities and its niche 

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strengths. 
But potential clients are asking

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for deployment histories that 
can do much more than that, and 

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they also don't even exist yet. 
And Tropic and a open AI have 

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those histories. 
They have the relationships, 

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they have the compliance 
certifications. 

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But there's also a counterpoint.
Some users on X report a 36 to 

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one ROI for marketing teams 
using Grok. 

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That kind of grass roots 
advocacy matters. 

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If enough businesses see value 
in specific use cases where it 

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spreads, go after the marketing,
make money. 

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Go after the stock trading, make
money, have enough businesses 

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see value. 
That will be money for XAI. 

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But scaling for from individual 
users to enterprise contracts 

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requires a different kind of 
infrastructure. 

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It requires account managers, 
service level agreements, and 

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support teams that can respond 
at scale if anything goes wrong.

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Now XAI has some legal stuff 
going on, too. 

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Musk's lawsuit against Apple and
Open AI appears driven more by 

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personal fixations than Grok 
Promotion, but it impacts 

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perception. 
Corporate buyers evaluating XAI 

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see a company whose CEO is 
publicly fighting with 

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competitors. 
That's not stable. 

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Nobody wants that. 
Nobody wants the drama now. 

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The broader lesson here is about
timing. 

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XAI entered the market late and 
is trying to catch up through 

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sheer capital and technical 
wisdom. 

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The valuation is massive. 
The burn rate is massive. 

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The team is growing slowly, 
steadily. 

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But enterprise sales move 
slowly. 

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Companies take months to 
evaluate vendors, run pilots, 

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and negotiate contracts. 
And XAI needs quick wins to 

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justify its spending and to make
some money. 

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And quick wins in enterprise? 
They're pretty rare. 

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It's going to take a long time 
before XAI catches up to Open 

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AI. 
Hey, thank you so much for 

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listening today. 
I really do appreciate your 

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support. 
If you could take a second and 

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It helps out the show 

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tomorrow.