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Grok Bot is growing fast—but Elon Musk says its costs are ‘unsustainably high’ compared to revenue | Fortune

Grok Bot is growing fast—but Elon Musk says its costs are ‘unsustainably high’ compared to revenue | Fortune

Grok is on a streak. On SpaceX’s Q3 earnings call on Oct. 20, CEO Elon Musk told analysts the company’s AI bot is “seeing the fastest growth of a product that I’ve ever seen in my life.” But that growth comes with a cost. On Sunday, Musk responded to an X user who asked him

Grok is on a streak. On SpaceX’s Q3 earnings call on Oct. 20, CEO Elon Musk told analysts the company’s AI bot is “seeing the fastest growth of a product that I’ve ever seen in my life.”

But that growth comes with a cost. On Sunday, Musk responded to an X user who asked him to reset their Grok Bot usage allowance after it ran out four days early. 

“The cost of serving Grok Bot was unsustainably high relative to revenue,” Musk wrote on X. 

Musk’s reply highlights a problem facing AI companies that even users who pay for AI can cost more to serve because they use AI agents that perform more compute-intensive tasks. 

Grok Bot, an AI agent developed by SpaceX that launched in August, can carry out multi-step tasks on users’ behalf such as browsing websites, drafting emails, and processing invoices, and it can work across apps and websites as well. 

SpaceX President Gwynne Shotwell told analysts on the recent earnings call that Grok Bot reached 800,000 paid weekly users earlier that month, double the number of users in September. She said businesses are “the fastest-growing category,” using Grok for IT, sales, marketing, and engineering. Musk added that customers are using Grok more as its capabilities improve. 

“We’re seeing users use it more per week, not use it less,” he said on the call.

But people using Grok Bot more could cost SpaceX. Unlike chatbots that respond to individual prompts, AI agents work through several steps to complete more complicated tasks, which use up more computing power. More frequent users, therefore, drive up SpaceX’s costs without necessarily paying more. 

Meta is facing a similar problem with Muse. CEO Mark Zuckerberg told analysts in Meta’s October earnings call that Muse, which attracted 10 million users since it launched on Sept. 8, is costly to run, and so the tech giant expects to improve its compute efficiency tenfold in the next year. 

This cost dilemma comes as SpaceX pours billions into its AI business. Its “Super Intelligence” division made $7.56 billion in Q3 revenue, up from $813 million a year prior. It also reported $431 million in operating profit, compared with a $1.7 billion loss a year earlier. 

But it’s spending more on AI infrastructure than that division is bringing in revenue. SpaceX spent $16.4 billion on AI capex, more than twice the Super Intelligence division’s quarterly revenue and accounting for 84% of its total $19.6 billion in Q3 capex, according to its SEC filing.

Much of its Super Intelligence revenue growth came from leasing out data center capacity to Anthropic and Google. This means SpaceX now must decide how much computing power to devote to its own AI products and how much to rent to other companies. 

Musk told analysts SpaceX aims to “split it 50-50” between the two, but also said demand for Grok could change that calculation.

“I think Grok Bot may end up being what uses most of our Super Intelligence compute,” he said. 

Compute demand has been strong. Musk said SpaceX is “hounded relentlessly” by hyperscalers and smaller companies searching for compute, and those contracts are being renewed at higher dollars per watt. 

“It’s not impossible that we will have a six-month payback period for compute next year,” he told analysts. 

SpaceX did not respond to Fortune’s request for comment.

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