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Stardust Power Inks SPAC Deal to Go Public on Lithium Demand Opportunity

Stardust Power has set sights on taking advantage of the ever-growing demand for lithium, a metal primarily used in ceramics and pharmaceuticals. Amid the ever-growing interest and demand for Lithium in powering electric vehicles, there has been an increased focus and interest in companies with tremendous exposure to the critical mineral.

Stardust Power SPAC Deal

Likewise, Stardust Power is one company that has elicited strong interest on Wall Street. Similarly, the company has announced plans to go public through a merger with blank check company Global Partner Acquisition Corp. II in a deal valued at $490 million. The company has already entered into a definitive agreement for a business combination with the special purpose acquisition company.

Under the terms of the agreement, Stardust is to become a publicly listed company on the NASDAQ trading under a new ticker, SDST.  The transaction is expected to close in the first half of next year. The company remains focused on becoming a leading producer of battery-grade lithium products to take advantage of the increases in electric vehicle adoption over the next decade.

With demand for lithium expected to increase by over 5,000% by 2030 as lithium-ion batteries are needed to power vehicles, Stardust intends to be at the center of the supply chain. Consequently, the company plans to construct a lithium refining facility in Greater Tulsa, Oklahoma.

The Oklahoma refinery site is on course to come online as it already has access to existing power, water supply, and wastewater treatment. It also has connections to significant railways that can be used to transport the raw materials and the final products. The facility is expected to draw hundreds of employees, helping support the local economy.

The facility will have a production capacity of 50,000 metric tons per year of American battery-grade lithium. Stardust Power plans to leverage direct lithium Extraction technology to recover raw lithium. The process is more efficient than traditional brining pond methods of production and is environmentally sustainable.

In addition, the facility is expected to take advantage of the little lithium refining capacity in the US as more gigafactories crop up across the country amid the growing demand for battery-grade lithium. Amid the minimum refining capacity in the US, most of the worldwide lithium resources are sent to China for refining at 85%.

Growing Lithium Demand

Stardust Power’s proposed new battery-grade lithium refining facility is expected to address the US push to reduce its reliance on China for crucial metals. The country boasts some of the highest lithium reserves at 17%, which can benefit immensely from domestic refining.

The facility should expand the US domestic manufacturing while helping secure the country’s energy dependence by reducing supply chain dependence. Much of the world’s lithium comes from South America and China, which dominate the supply chain for lithium-ion batteries.

Demand for lithium batteries is expected to grow sixfold by 2030, reaching $55 billion per year. This increase is fuelled by climate-conscious customers who are increasingly purchasing electric cars and shunning fossil-fuel vehicles. In addition, the US needs far more lithium to achieve its clean energy goals.

Nvidia Partners SandboxAQ to enhance Batteries and Drug Discovery Using AI

Nvidia has inked a strategic collaboration with   SandboxAQ to accelerate the development of new materials for medicines and batteries. As part of the strategic collaboration, SandboxAQ will help the chip giant enhance the capabilities of its CUDA software platform, which is at the heart of developing artificial intelligence applications.

Nvidia SandboxAQ Partnership

Nvidia is teaming up with the startup spun off Alphabet to accelerate the process of simulating quantum mechanics that is key to chemical, biological and material science. A combination of the startup’s AI simulation capabilities with the chip giant’s computing and quantum platforms is expected to accelerate the discovery of new materials and chemical compounds.

The chemical compounds and materials up for development are crucial to transforming various industries, especially the medical space. They are also expected to address some of the world’s biggest challenges, more so in the electric car space where the development of electric batteries that can support long range on a single charge is crucial.

The strategic collaboration comes against the backdrop of Nvidia updating its H100 artificial intelligence processor. The world’s most valuable chipmaker has added more capabilities to the chip as it seeks to affirm its dominance in the AI computing market. H200 is the new chip that will have the capability to use high bandwidth memory therefore able to cope with large data sets for developing and implementing AI

The updated chip will keep up with the growing size of data sets used to create AI models and services. It will also be much faster in bombarding software with data. While the current version is already famously in high demand, the updated version elicits strong interest from Amazon Web Services, Oracle and Google’s Cloud.

SandboxAQ is perfect for Nvidia as it boasts of a simulation technology that relies on quantum algorithms that have been too big and complex to run on computers. With the help of powerful chips like Nvidia’s A100 and H200, the startup should be able to address the underlying challenges and develop crucial materials.

In addition to focusing on developing materials for medicines and batteries, the collaboration could also lead to the creation of applications that will significantly help the services sector. The two also plan to redefine the energy industries with better innovation as part of their collaborations.

Quantum Computing Push

Nvidia’s collaboration with the $4 billion startup is crucial to the push for an error-free quantum computer. There is a need to have a technology that can process vast troves of data millions of times faster than most powerful supercomputers.

Companies like Alphabet’s Google are racing against time to build a practical quantum computer, hoping to leapfrog existing technologies. Faster information processing is also crucial in accelerating drug development. The US   is spearheading quantum computing development to stay ahead of China.

President Joe Biden’s administration has already imposed limits on US investments in Chinese quantum computing firms. The restriction is part of the US push to avert the possibility of China developing the next generation of surveillance technologies

Sapeon’s Sets Sights on Nvidia with Powerful AI Chip

Nvidia has something to worry about, semiconductor startup Sapeon Inc. having unveiled a new powerful artificial intelligence chip in the highly competitive market. Sapeon X330 chip is the new chip boasting four-time computational performance and more than twice the power efficiency of its predecessor, X220.

Sapeon’s Powerful X330

The new Chip targets the growing demand for chips able to handle artificial intelligence innovation and solutions. It is designed to speed up servers, enabling them to handle mobile devices from drones to self-driving vehicles while performing better with AI than its predecessor.

Sapeon is discussing with significant customers who have shown strong interest ahead of the X330’s mass production in the first half of next year. The company has what it takes to take on industry heavy-hitters, as it boasts the backing of South Korean conglomerate SK Group.

Other investors in the Santa Clara, California-based company include SK Telecom Co, SK Hynix Inc, and investment firm SK Square Co. Sapeon X220, developed in 2020, remains the company’s flagship non-memory semiconductor explicitly set for data centers. The Chip can execute large-scale calculations necessary for AI services at high speed and low power.

Following the split of Sapeon into an independent entity, research and development have led to X330, believed to be the next breakthrough in the highly competitive AI landscape. The Chip is expected to elicit strong interest from the market amid the growing adoption of generative AI.

Burgeoning Generative AI

Nvidia has been one of the beneficiaries of the generative artificial intelligence boom amid growing demand for its graphic processing units. With the generative AI market expected to balloon to $1.3 trillion over the next ten years from $40 billion in 2022, companies can tap into significant room for growth

Nevertheless, companies with a head start in the form of powerful chips capable of handling all kinds of AI demand are poised to be the biggest beneficiary in the burgeoning landscape. Growth in the generative AI space is expected to expand at a compound annual growth rate of 42%, driven by the training infrastructure in the near term and a shift into inference devices for large language models.

Competition has been heating up in the AI semiconductor space as Amazon and Alphabet invest in their bespoke server silicon. As more mobile devices come online, companies are increasingly investing in powerful chips that allow their servers to process vast troves of data faster and more efficiently as they look to unlock value and insights.

Rising demand for generative AI products is expected to add about $280 billion to software revenue driven by specialized assistants’ new infrastructure products. Nvidia has seen its market value triple over the past year by posting record-breaking revenues and earnings on strong demand for its GPUs.

Microsoft and Google have also benefited from generative AI by launching AI-powered Chatbots. The chatbots are strengthening the company’s search engine business by enhancing users’ search experience. Likewise, Sapeon is expected to be one of the beneficiaries as its X330 chip will elicit strong demand for use in data centers to enhance its processing capability and ability to handle vast troves of data.

Goldman Sachs Strategists Forecast More Stock Gains into 2024

More gains are on the way in the equity markets. That is the stance held by strategists at Goldman Sachs, who believe there is still some room for equities to edge higher after an impressive 2023. The remarks come on the heels of the S&P 500 rallying by about 17% year to date, with tech-heavy Nasdaq 100 rallying by over 40% on growing risk appetite.

Goldman Sachs Estimates

The team at Goldman Sachs led by David Kostin expects the Bull Run to persist into 2024, aided by the Federal Reserve’s slow monetary policy tightening.  The S&P 500 has been on an upward trajectory in 2023 as equities continue to withstand high-interest rates. Easing inflation has convinced the Fed to go slow on hikes and has also helped bolster sentiments.

The investment bank projects that the S&P 500 will close 2024 at 4,700 points, implying a 5% upside potential from current levels. However, this gain will be much lower than the 17% rally registered this year.

A second year of gains in 2024 would mark a significant turnaround from the bear run in 2022 that saw most counters tumble by double-digit percentage points. The slump came at the back of soaring inflationary pressure and the Fed’s aggressive monetary policy tightening spree.

Goldman Sachs’s bullish thesis depends on the US economy avoiding a recession. There have been fears that the Federal Reserve’s sticking to the high-interest rate environment could cause a mild recession. With the Fed unlikely to cut interest rates until mid-next year, the economy could heat up.

Equities came under pressure in the third quarter amid fears that the Fed will continue hiking interest rates instead of cutting at year-end. While fears have subsided regarding the Fed’s pausing of hikes for two consecutive meetings, there is still a chance the economy could plunge into recession due to the high-interest rate environment.

Equities Outlook

Nevertheless, the economy avoiding recession is not the only factor that Goldman Sachs expects to offer support to rallies in the equity market. The strategists expect rising earnings to have a significant impact in fuelling investor interest in equities. Valuations remaining steady should also continue to fuel risk appetite in the equities market.

Kostin and the team expect returns in the equity markets to be concentrated in the second half of next year due to resilient growth. Nevertheless, the looming US election is a major headwind that could suppress market risk appetite. However, later in the year, election resolution and a possible Federal Reserve Interest rate cut could offer the market the much-needed lift heading into 2025.

Strategists at Goldman Sachs are not the only ones overly bullish about US equities. Strategists at Morgan Stanley, led by Stanley Wilson, a staunch bear, have also taken a more positive view of stocks. Strategists at Bank of America insist investors expect a soft landing next year and remain overweight stocks and bonds.

The investment bank forecasts are supported by cooler-than-expected October US inflation data showing slowing inflationary pressures. The data signals that the Federal Reserve may not raise rates again, something that works in favor of equities.

Meta Platforms Explosive Rally After $251.3B Wipe-out

A year after suffering a $251.3 billion market value wipe-out, Meta Platforms has emerged as a Wall Street darling.  Investors who took advantage of the biggest wipe-out in history have been rewarded immensely, as the social networking giant has bounced back, more than quadrupling its market value.

Meta Platforms Bullish Thesis

While the stock is up by more than 160% for the year, investors and analysts are confident that there is still some room on the upside given the solid underlying nag fundamentals. Meta Platforms is benefiting from increased spending on advertisements on its flagship apps, Instagram and Facebook.

Likewise, a restructuring drive that commenced last year, resulting in the reduction of the workforce and a focus on areas with high growth, has strengthened its market sentiments. Consequently, the stock’s market sentiments have improved significantly, with the stock commanding 62 buy-equivalent ratings of the 70 analysts covering it. It’s the highest number since the firm went public in 2012.

The solid buy rating on Wall Street is backed by the investment thesis that Meta remains a preferred advertising platform for most advertisers. The company boasts of an unmatched scale relative to its competitors, owing to the millions of active users that flock to its Facebook and Instagram apps daily. Advertising sales have increased significantly a year after concerns they had contracted as advertisers pulled back amid inflationary pressures in the market.

CEO Mark Zuckerberg’s shelving of a multibillion-dollar plan to build a version of the metaverse has also boosted Meta Platform’s sentiments in the market. The increased focus on cost-cutting has toned down metaverse talk, and robust revenue growth affirms Meta Platform’s prospects and growth metrics.

Analysts are overly optimistic about the company’s long-term prospects, with estimates indicating the company is on course to generate $18 a share in earnings next year. It will be a significant improvement from the $10 a share generated last year. While the company’s valuation has increased significantly to about 18 times earnings over the next 12 months, Meta stock is still the cheapest stock among the seven biggest tech and internet stocks.

Meta Platforms Headwind

Nevertheless, the high earnings expectations are dependent on economic growth. The Federal Reserve has already hinted at the possibility of maintaining the high interest rates for longer in the race to push inflation below the 2% level.  The economy’s risk of plunging into recession is high, with economists projecting a mild recession amid the high-interest rate environment. A recession would hurt Meta Platform’s ability to attract revenues from its lucrative advertising business.

Competition is another headwind standing in the way of Meta Platform achieving its earning expectations. Needham & Co’s analyst Laura Martin has a sell rating on the stock, insisting that the company is a risk amid rising competition.  There is already talk that TikTok is eating into Facebook’s domain, having emerged as a favourite networking app for millions of people worldwide.

Changes to mobile operating systems like the one on Apple that hurt Meta Platform’s ability to target users with ads, is another headwind that could take a toll on the company’s prospects in the advertising business.

Intel Invests in Stability AI amid Board Wrangles

Stability AI, an AI startup that has been facing human resource challenges and concerns about slow revenue growth amid huge expenses, remains an attractive investment prospect. Chip giant Intel is the latest to show strong interest in the startup best known for developing the Stable Diffusion image-generating software that creates realistic-looking images from a few words of prompts.

Intel – Stability AI Investment

Intel reportedly participated in a financing round that rose close to $50 million in the form of convertible notes.  According to the company’s spokesperson, the company has received interest from major venture capital and strategic investors.

The latest capital raise comes a year after the startup raised $101 million in a seed round that valued it at $1 billion, making it one of the most valuable startups. Since then, the company’s growth has slowed, and its valuation is believed to have dropped amid a seemingly endless string of headwinds.

The London-based startup has been spending millions of dollars a month on expenses believed to be more than $8 million. The expenses include computing, workers’ salaries, and research and development spending. On the other hand, CEO Emad Mostaque confirmed in July of last year that the startup’s projected annual revenue was more than $10 million. Still, that number is believed to have dropped significantly.

Stability AI is undergoing one of the most challenging periods, having already shed more than half a dozen senior employees.  The company’s general counsel and human resource chief tendered their resignation in October, less than two months after the company highlighted members of its leadership team. The departures complicate the company’s transformation from a flashy startup to an established artificial intelligence.

Stability AI Board Challenges

Disagreements on the board are the latest headwind threatening the startup’s future and sentiments in the burgeoning sector. Investment firm Coatue Management with $50 million worth of stakes has had issues with the current management. The investment firm has been pushing to add a co-CEO or president, a move that confirms its doubt about the current regime.

The bad blood between the investment firm and Stability AI became earlier in the year when general partner Sri Viswanath skipped the planned board meeting and opted to send the firm’s lawyer. Coatue exiting its position on the board in October affirmed the tensions and came after Intel made a strategic investment in the company.

Coatue is also believed to have exited the board because it holds a large stake in Advanced Micro Devices, a major Intel competitor. The board tensions were further confirmed with Lightspeed Venture Partners Gaurav Gupta leaving his role as a board observer amid differences in opinion with management. The direction Stability AI has been pursuing has also been a concern for the board members.

The board struggles do not come as a surprise as CEO Mostaque has often been a controversial leader, with most people who have worked with him questioning some of his statements. The executive has been questioned for presenting blue-sky conversations about partnerships and products before reaching an actual agreement

Co-founder Cyrus Hodes also sued Stability AI over what he claims is being tricked into selling shares for cheap shortly before the company clinched a billion-dollar valuation.

Here is why Microsoft Corp is Leading the Surge in Tech Stocks 

Software giant Microsoft Corp has been leading a stock price surge among major tech and internet companies, with its share price hitting a record high on Wednesday.

This rally in large technology stocks has added around $1.5 trillion to the total market capitalization of the Nasdaq 100 index over the past few days, indicating that the recent scepticism about these highly-valued market leaders may be subsiding.

Microsoft stock surges on strong quarterly results 

According Janus Henderson Investors portfolio manager Jonathan Cofsky Microsoft ticks most boxes because of its robust business model. The software giant’s execution is currently running well and it appears to be the outright winner in artificial intelligence. Generally, Microsoft has the most cyclical tailwinds and minimal secular risks relative to other tech companies.

The stock has been on a surge for nine consecutive sessions, marking the longest rising streak in almost four years. Since the end of September, Microsoft shares have gained 15%, dwarfing the seven mega caps that have been the talk of 2023. The rise has led to a market cap of $2.7 trillion close to Apple Inc.’s market capitalization of $2.84 trillion. 

Results for the recent quarter triggered the surge in stock price. In a season marked by mixed mega cap earnings reports, Microsoft reported a rebound in cloud growth thanks to increasing demand for AI products.  

Although Wall Street’s view of tech giants never really weakened, entering into current earnings season, questions were raised regarding the company’s value and capacity for growth. These worries were partially confirmed by Alphabet Inc.’s lackluster cloud performance and Apple’s poor Chinese sales.

But now, it appears that sentiments are turning around. This is partially due to an optimistic outlook on fiscal policy, since the most recent jobs report hinted that rate hikes by the US central bank might be coming to an end. Treasury yields have fallen from historical highs as a result, which has eased a significant obstacle to tech prices.

Analysts bullish on Microsoft stock  

According to Alliance Global Partners Mark Martiak, treasury yields may have peaked, and this will improve sentiment—particularly in the tech sector.

Additionally, Oppenheimer shares the same sentiment and named purchasing Microsoft stock to be top of its list for the end of 2023. On the other hand, Truist Advisory Services reviewed their rating on the sector at the beginning of the week citing strong balance sheet, earnings and cash flow generation which will continue supporting outperformance. 

Based on the recent earnings, UBS Global Wealth Management, asserts that concerns over tech fundamentals cannot be justified currently since earnings growth is likely to sustain outperformance. UBS Global Wealth Management Americas investment officer Solita Marcelli said that the firm’s long-term positive outlook in the software and AI sector is supported by the latest earning results. 

Since Microsoft is regarded an AI leader, the growth boost it received from that has helped to drive up its estimates. According to Bloomberg data, full-year projections for its net earnings have increased by 2.4% within the last month, whereas revenue projections have increased by 2.8% within the same time.

UBS Strategists Tout Chinese Tech Stocks amid Valuation Concerns in the US

Chinese internet stocks present a solid investment opportunity compared to US big tech companies. That’s the sentiment echoed by strategists at UBS Group AG, who believe Chinese internet stocks will do much better in 2024 compared to their counterparts in the US. The sentiments come amid growing valuation concerns on the US tech stocks exploding in 2023 amid the artificial intelligence boom.

Tech Valuation Concerns

Tech heavy NASDAQ index is already up by more than 40% for the year at the back of a blockbuster year. While the rally has been fuelled by solid earnings results and the artificial intelligence boom; it’s starting to show some weakness amid valuation concerns and the high-interest rate environment.

The US Federal Reserve hinting at retaining the high-interest rates for longer is the most significant headwind that could take a toll on US tech giants heading into 2024. The high-interest rate environment is already posing significant risk to the economy, with economists worried about a mild recession amid reduced borrowing needed to fuel economic activity.

UBS strategists insist the rising earnings expectations and depressed valuation make Chinese tech stocks like Alibaba a solid prospect heading into the New Year. The stocks have struggled to gain traction in 2023 as US tech giants hit new highs, as investors turned to them in expectation that the Fed will cut interest rates at the end of the year.

With the high interest rates likely to stay put for long, investors must look elsewhere for opportunities. Chinese tech shares are only starting to bounce back after years of underperformance triggered by Beijing’s crackdown on internet giants.

Chinese Stock Recovery

A recovery of the Chinese economy from the COVID-19 slowdown has once again improved the stock’s prospects on the back of easing regulatory pressure. Taiwan Semiconductor and Samsung are some of the semiconductor players that UBS strategists believe provide a solid risk-reward as they trade cheaply despite their tech advantage.

Over the years, Chinese tech stocks have lagged behind US tech giants despite the company’s efforts to cut costs and shore up earnings. However, that is slowly changing as investors take note of the depressed valuation amid improving valuations. Nasdaq Golden Dragon China Index, which counts some of the biggest Chinese internet giants, trades at a 30% discount compared to the Nasdaq 100 Index on price-to-earnings ratio, affirming the cheap valuation in play.

UBS strategists maintain a cautious approach to US tech giants led by the magnificent seven that have been at the forefront in fuelling the rally in the US equity markets. The strategists have already dropped their outlook on the likes of Apple and Tesla, facing profit concerns despite commanding premium valuations in the market.

The strategists have raised concerns about the faltering earnings trend in most US tech giants that need help with saturation and competition in their respective fields. Apple is one of the companies struggling to sell as many iPhones as it used to amid smartphone saturation. Tesla is also under immense pressure amid stiff competition in electric vehicles, especially in China.

Tech stocks aside, US strategists are turning their attention to software companies. The strategists say the companies are well positioned to do well, given their defensive nature and high recurring revenue streams.

Bitcoin’s Dominance Eases amid Widespread Crypto rally

Bitcoin’s grip on the multibillion cryptocurrency sector has eased significantly as investors and traders take interest in other smaller coins. Immediate data indicates that speculation in the sector has spread beyond the flagship cryptocurrency. The largest 100 digital assets are up 14%, while the 30 mid-tier tokens are up 16%, exceeding the 4% gain of Bitcoin in November.

Widespread Crypto Rally

The widespread rally has seen Bitcoin’s share of the $1.38 trillion crypto market drop to 49% from 51.5% in October. The drop hints at a significant uptick in risk appetite in the market as investors turn their attention to other little-known coins trading at much more depressed valuations than Bitcoin.

Ripple is one of the smaller coins that has been one of the strongest performers for the month. The crypto has rallied by more than 14%, benefiting from Ripple Labs’ partial victory over the US Securities and Exchange Commission over whether XRP should be treated as a security under the agency’s purview. The crypto rally is also spreading beyond normal altcoins to decentralized finance, one of the fastest-growing segments in the market.

The fact that the rally is broader is also a good sign and most sustainable on any price action experienced for the better part of the year. According to Digital Asset Capital Management co-founder Richard Gavin, the widespread rally in an environment that’s relatively thin in regards to liquidity signals the maturity of the broader sector.

Sentiments in the broader cryptocurrency sector have improved in recent months on expectations of listing a Bitcoin exchange-traded fund. Such a fund is expected to attract more institutional investors into the nascent segment, affirming cryptocurrencies’ push for adoption in the mainstream sector. While Bitcoin has rallied by more than 28% over the past month, a sense of optimism in the broader sector has also seen other cryptocurrencies post double-digit gains.

Interest Rate Pause

Optimism that the US Federal Reserve has reached its peak on interest rate hikes is another factor that’s helping attract more investors into the crypto sector. Investors had fled the risky asset early in the year, opting to focus their attention on instruments that benefit from higher yields, such as bonds and treasuries.

With the Fed unlikely to hike interest rates, there is an expectation that dollar strength will ease significantly, something that could be of great benefit to cryptocurrencies. Bitcoin is already up by more than 100% for the year, bouncing back on coming under pressure last year as investors shunned risky assets amid soaring inflation. The Fed hiking interest rates at the fastest pace to tame runaway inflation resulted in dollar strength, all but piling pressure on Bitcoin and other cryptocurrencies.

Unlike in the past when Bitcoin was highly volatile, its move to the upside has been steady in recent months. The rally had affirmed constant buying in the market, with the focus also being on other cryptocurrencies compared to the past when Bitcoin was the center of attention. The more widespread shift in investor sentiment has helped tame the heightened volatility that was a concern in the past.

Elon Musk Unveils Grok To Rival ChatGPT and Bard on AI Powered Chatbots

Elon Musk has come through on his initial call for a third force to rival Google and Microsoft on artificial intelligence. Earlier in the year, he called for a third horse to rival the tech giants on concerns over the advances being made that require a lot of scrutiny and regulation. Grok is Musk’s new AI tool out of his AI company xAI. The chatbot is poised to take OpenAI’s ChatGPT, and Google’s Bard Musk has been accused of being politically biased.

Musk AI Company

Grok is the new AI-powered chatbot with a rebellious streak and the ability to answer any question. In a world where most chatbots are designed or programmed to be politically correct with their responses, Grok should be able to answer questions that other AI chatbots dodge.

xAI has emerged as Musk’s go-to Artificial Intelligence Company as he seeks to play a pivotal role amid the artificial intelligence revolution. The company, which came into being in July, is stacked up with experience, with most of its staff being former employees of OpenAI DeepMind, among others. The startup has set out to build artificial intelligence to advance the collective understanding of the universe.

Reports indicate that Musk runs xAI separately from other companies. However, the technology being developed will be used in other businesses. For starters, Tesla is increasingly leveraging artificial intelligence to enhance its self-driving features.

Leading up to its release, Musk outlined how Grok was able to provide a recipe for homemade cocaine, signaling its ability to provide answers to queries that other tools would often decline or dodge. “Just a moment while I pull up the recipe for homemade cocaine. You know, because I’m totally going to help you with that,” Grok responded while requesting the cocaine recipe.

Grok also proved its prowess in middle school math problems and Python coding tasks, having surpassed other models in its computing class. The fact that it beat ChatGPT 3.5 and Inflection underscores its edge in the segment.

Musk AI Chatbot

In a bid to strengthen Grok’s competitive edge and ability to provide answers to clarity, it will have access to a vast pool of data including X, the social networking app that Musk acquired for $44 billion. The prototype is still under development in the beta phase and available to a select number of users before its release to a broader population

Currently, xAI is accepting early users through a waitlist as it continues to fine-tune it to take on ChatGPT and Bard have remained the go-to chatbots for the better part of the year. Nevertheless, it is highly unlikely that Grok will be available to all users once development is complete. Musk says that it will be a feature of X premium+ and will cost $16 a month.

Even as Musk continues working on artificial intelligence innovations, he has warned of the dangers that the technology poses to the human race. He has already termed it the biggest existential threat, given that it is moving too fast, like summoning the demon. Similarly, he has called for more regulation of the burgeoning AI landscape.