Elon Musk's AI effort is flopping as he rents out data centers to competitors: WSJ

For all his claimed brilliance as a tech wizard, billionaire Elon Musk’s foray into the multi-billion-dollar race for artificial intelligence (AI) supremacy is, at best, floundering with users, according to a report from the Wall Street Journal.

Late Monday, the Journal reported that Musk’s AI chatbot Grok is trailing so far behind competitors like ChatGPT and Claude, that Anthropic, the company behind Claude, signed an agreement in early May, taking over "all the computing capacity at one of Musk’s main data centers,” at a time when Anthropic and rival OpenAI have been “racing to acquire all the computing capacity they can.”

Since its launch two years ago, Grok has reached millions of users through integration with Musk's X social network, however, new data reveals the chatbot's growth has stalled entirely.
Downloads of Grok fell to approximately 8.3 million in April, down from more than 20 million in January — a stunning 59% decline in just three months when AI usage is exploding, according to analysis firm AppMagic, the Journal is reporting, adding that survey of more than 260,000 U.S. consumers and workers who use AI found that only 0.174% said they paid for Grok in the second quarter of 2026 — essentially flat compared to 0.173% a year earlier, according to research firm Recon Analytics.
Tech investor and engineer Ben Pouladian offered a biting assessment of Grok's market position to the Journal: "OpenAI is Coke, Anthropic is Pepsi and Grok is RC Cola. I never really saw people drinking it."
Pouladian, who drives one of Musk's Tesla vehicles and is active on X, stated he downloaded Grok when it launched in late 2023 and tried it out — but never became a power user. He said he prefers Anthropic's Claude, OpenAI's ChatGPT, and sometimes Google's Gemini
Musk released Grok in late 2023 with grandiose promises, vowing to make it "the most popular AI in the world" and claiming it would be "maximally truth-seeking" and less "woke" than competitors, the Journal reported.
In summer 2025, Musk personally holed up at his AI startup trying to catch up in the AI arms race. He personally oversaw the design of a "racy" chatbot and implemented settings allowing users to create suggestive and sexualized content — a strategy former employees said was designed to spur engagement but the strategy never panned out, with Grok barely growing even within enterprise organizations, Erik Bradley, chief strategist and research director at Enterprise Technology Research told the Journal, while the use of Claude and Gemini is soaring among business customers.