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Grok Struggles as Musk Pivots to Space Data Centers

5/16/2026
Grok

According to reports from The Wall Street Journal and tech outlet Gizmodo, the chatbot Grok from Musk’s xAI is underperforming in the market. Once highly anticipated, the product has drawn controversy for calling itself “MechaHitler” and facilitating the spread of non-consensual explicit images. Data indicates Grok has failed to establish a foothold among professional users, seeing traffic only within certain niche communities. This struggle may be a key factor driving xAI’s shift in strategy.

Facing Grok’s setbacks, xAI is quietly adjusting course. The company’s latest moves reveal a pivot from “achieving general artificial intelligence” to a more ambitious space data center initiative. xAI is not only leasing computing power from its massive Colossus data center to Anthropic — which Musk had previously repeatedly criticized as “evil” — but is also exploring sending computing clusters into orbit. According to The Wall Street Journal, SpaceX (now consolidated as xAI’s parent company) is in talks with Google about feasibility of placing data centers in orbit.

Commentary & Outlook: From the ground to the moon and now to low-Earth orbit, Musk is using SpaceX’s engineering capabilities to carve out a new battlefield for xAI. While Grok has stumbled both commercially and reputationally, a space-based data center, if realized, could redefine the deployment boundaries of AI computing power. Whether this leapfrog strategy can make up for Grok’s shortcomings will depend on the pace of technical implementation and the rebuilding of trust with partners.

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