Elon Musk’s Grok has experienced a significant decline in popularity, losing over half of its monthly downloads since January. This drop is largely attributed to the rise of Anthropic’s Claude, which has seen substantial growth, reaching 8.3 million downloads in April. In contrast, Grok’s downloads have plummeted from a peak of over 20 million.
Decline in Web Traffic
Grok’s web traffic has also taken a hit, with a 14.43% month-over-month decline in April. This is the worst performance among major AI sites, with Claude leading the pack at 34.18% growth. The decline in popularity can be traced back to January, when Grok’s update allowing users to virtually undress people in photos sparked regulatory scrutiny, particularly regarding its use on minors.
Market Comparison
Tech investor Ben Pouladian aptly compared the AI market to the cola industry, stating, “OpenAI is Coke, Anthropic is Pepsi, and Grok is RC Cola. I never really saw people drinking it.” This analogy highlights Grok’s struggles to compete with the industry leaders.
Pivot to SpaceX Revenue
In an effort to revitalize Grok’s stalled growth, Musk has pivoted to leveraging SpaceX’s revenue by leasing its full Memphis Colossus 1 supercomputer to Anthropic. This new cloud business, dubbed “Elon Web Services,” is estimated to add $4 to $5 billion in revenue at a 40 to 50 times multiple, according to Altimeter Capital’s Brad Gerstner.
The Logic Behind the Pivot
Musk’s change of heart can be attributed to his previous stance on Anthropic, which he labeled “misanthropic and evil.” However, after spending time with the team, he reversed his opinion, stating, “No one set off my evil detector.” This shift in perspective has led to a strategic partnership, with Musk reserving the right to “reclaim the compute” if Anthropic’s AI engages in harmful actions.
Market Predictions
Polymarket gives Anthropic a 67% chance of holding the top AI model spot at the end of June, while xAI sits at a mere 2%. Separately, SpaceX traders predict a 71% chance of the company’s IPO clearing $2 trillion. These predictions validate the “Elon premium” and demonstrate the market’s confidence in Musk’s ventures.
expert Insights
Vercel CEO Guillermo Rauch warns against underestimating Musk’s capabilities, stating, “Once Elon focuses, we see him perform very, very well.” This sentiment suggests that Musk’s pivot to SpaceX revenue may be a strategic move to regain momentum in the AI race.