Comment by slipperybeluga

I get what you're saying, but I don't see the issue here. 95% of people don't need latest Claude Opus or Fable for their work. Most people are not software engineers. Having a model that excels at other things and is faster, cheaper, accessible directly via social media, and "good enough" is a viable pathway. AI aside, when was the last time your company provided you with the "best" tool? Microsoft has made being third best in the desktop OS and cloud provider markets a highly profitable art form. I think it's too early to pick winners in AI right now.

And as others said here, xAI is also probably throwing money into AI and hoping for a breakthrough. Except in this case it's a rocket company, social media company, cloud compute provider, and satellite ISP all rolled into one that can not only bankroll the development and perform all kinds of crazy accounting shell games but can potentially benefit from any breakthroughs in other lines of business. If those Google and anthropic compute contracts hold, a lot of investment is recouped.

Maybe I'm desensitized from the launching of the Tesla Roadster into space, "bulletproof" cyber truck, and the boring company flamethrower, but this doesn't seem too wild to me.