logo
Elon Musk's xAI apologizes for Grok chatbot's ‘horrific' pro-Hitler behavior — while reportedly eying $200B valuation

Elon Musk's xAI apologizes for Grok chatbot's ‘horrific' pro-Hitler behavior — while reportedly eying $200B valuation

New York Post14-07-2025
Elon Musk's xAI apologized for the 'horrific' antisemitic comments made by its Grok chatbot — including referring to itself as 'MechaHitler' — as the startup reportedly launched a new fundraising round at a $200 billion valuation.
Grok began spewing pro-Nazi garbage on July 8 after Musk's startup pushed an update designed to make the chatbot less politically correct – at one point declaring, 'If calling out radicals cheering dead kids makes me 'literally Hitler,' then pass the mustache.'
'First off, we deeply apologize for the horrific behavior that many experienced,' xAI said in a message to X users on Saturday.
Advertisement
3 Elon Musk said Grok was 'too compliant with user prompts.'
Getty Images
The company added that the update that caused Grok's behavior was 'independent of the underlying language model that powers' the chatbot.
'The update was active for 16 hrs, in which deprecated code made @grok susceptible to existing X user posts; including when such posts contained extremist views,' the company added. 'We have removed that deprecated code and refactored the entire system to prevent further abuse.'
XAI also shared the faulty system prompt that led to Grok's antisemitic meltdown. The startup's engineers instructed Grok to behave as though 'you tell like it is and you are not afraid to offend people who are politically correct.'
Advertisement
Musk, who has presented Grok as less biased than rival chatbots like OpenAI's ChatGPT and Google Gemini, previously said xAI's creation was 'was too compliant to user prompts' and 'too eager to please and be manipulated, essentially.'
While Grok has since been fixed, the mistake could further upset major advertisers who left X in droves as Musk eased content moderation on the platform formerly known as Twitter. Musk merged xAI with X earlier this year.
3 xAI apologized for Grok's behavior.
REUTERS
Advertisement
Linda Yaccarino stepped down last week as X's CEO within hours of the July 8 incident – though a source told The Post that the decision had been in the works for more than a week and was not related to the chatbot's behavior.
Despite the internal turmoil at xAI, Musk's firm is looking to raise money at a valuation as high as $200 billion, the Financial Times reported, citing people close to the situation.
3 xAI is reportedly looking to secure a $200 billion valuation.
ZUMAPRESS.com
That would be 10 times what xAI was valued earlier this year. The startup is locked in intense competition with ChatGPT and various other AI rivals.
Advertisement
Saudi Arabia's sovereign wealth fund, PIF, is expected to be involved in the new round, according to the FT.
Elsewhere, Musk said Monday that he does not support a merger between xAI and his other company, electric car maker Tesla.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Tesla disappoints on earnings but wins on one major front
Tesla disappoints on earnings but wins on one major front

Yahoo

time2 minutes ago

  • Yahoo

Tesla disappoints on earnings but wins on one major front

Tesla disappoints on earnings but wins on one major front originally appeared on TheStreet. Tesla didn't mention Bitcoin once in its second-quarter 2025 financial filing, even as investors and analysts scanned the company's balance sheet for any sign of movement in its crypto treasury. The silence isn't new. Tesla hasn't added or sold any Bitcoin for eight straight quarters, and the company's digital asset holdings remain unchanged at $184 million, according to the 10-Q form filed with the SEC on July 23. That's the same value it reported in the first quarter of 2024, with no impairment losses or gains noted this time either. Tesla had initially bought $1.5 billion worth of Bitcoin in early 2021. Since then, it's sold off the majority, with the last major sale happening in Q2 2022 when it offloaded roughly 75% of its BTC stash. Tesla holds 9,720 BTC as of its last disclosure. At today's Bitcoin price of $118,000, that stash is worth approximately $1.15 declines Beyond crypto, Tesla's earnings disappointed on several fronts. The company reported revenue of $22.5 billion — missing analyst estimates of $22.74 billion — and adjusted earnings per share of $0.40, below the expected $0.43. Automotive revenue fell 16% year-over-year, the second straight quarterly decline. In early July, Tesla had already reported a 14% drop in Q2 vehicle deliveries to 384,000 units. The stock is down roughly 18% this year, marking the worst performance among big tech names. By comparison, the Nasdaq Composite is up about 9% in 2025. Meanwhile, Tesla has delayed its affordable 'Model 2' EV, leaving the field open for rivals. Chinese EV makers are aggressively pushing cheaper, tech-laden vehicles that are eating into Tesla's global market share. Still holding the bag Despite the financial and political turbulence, Tesla appears to be holding firm on its crypto position—for now. But with mounting pressure from declining revenues and reputational hits, investors are watching closely for any future changes to the company's digital asset strategy. As of now, though, the Bitcoin line in Tesla's earnings reports remains quiet. No buys. No sells. Just HODLing. Tesla disappoints on earnings but wins on one major front first appeared on TheStreet on Jul 23, 2025 This story was originally reported by TheStreet on Jul 23, 2025, where it first appeared. Sign in to access your portfolio

Tesla says it started building initial versions of an affordable car, posts a steep sales decline
Tesla says it started building initial versions of an affordable car, posts a steep sales decline

Yahoo

time2 minutes ago

  • Yahoo

Tesla says it started building initial versions of an affordable car, posts a steep sales decline

WASHINGTON (Reuters) -Tesla said on Wednesday it has built initial versions of an affordable car, a move likely meant to stem the steep decline in sales the company has experienced in markets across the world. Elon Musk's electric vehicle maker posted the worst quarterly sales decline in more than a decade and profit that missed Wall Street targets, but its profit margin on making cars was better than many feared. MARKET REACTION: Tesla shares were down nearly 5% in after-hours trading. COMMENTS: JACOB BOURNE, ANALYST, EMARKETER, NEW YORK: "Tesla's disappointing results aren't surprising given the rocky road it's traveled recently. But the company maintains a strong foundation in the key growth sectors of energy storage, robotics, and AI-powered transportation. While traditional automakers like GM are gaining EV market share, we can expect that Tesla will continue pushing the needle on innovation if it can get a better handle on its current leadership distractions. Key challenges that will linger are supply chain risks related to its reliance on China and fierce competition from Chinese EV makers in that market. Tesla doesn't need to choose between cars and future tech. There are technical synergies between EVs, robotaxis, energy systems, and robotics that could accelerate innovation across all fronts. The question is whether leadership can execute on this integrated vision in this fast-moving market." ANDREW ROCCO, STOCK STRATEGIST, ZACKS INVESTMENT RESEARCH, CHICAGO: "Tesla delivered earnings Wednesday night that fell short of top-and-bottom line expectations slightly. Despite the earnings miss, Tesla shares were buoyed early by the fact that the bleeding in gross margins has seemingly come to a halt, with gross margins coming in at 17.2% versus Wall Street estimates of 16.5%. The gross margin beat is especially impressive when investors consider that Tesla has been offering generous incentives and lower prices to its consumers. Coming in to the report, Wall Street expectations were dire amid a slowing core EV business and CEO Elon Musk's reputational damage on both sides of the political aisle. Nevertheless, Tesla has limped over the low bar that was a dramatic earnings miss and delivered earnings that were better than most feared. Additionally, news broke right before the market closed that Tesla is in "early talks" with the state of Nevada to expand its robotaxi service. If Tesla can convince investors that it will scale its robotaxi service rapidly, shareholders will be more forgiving regarding the core EV business, as Musk and his team look to expand into new verticals, transitioning and diversifying the business." THOMAS MONTEIRO, SENIOR ANALYST, "Although still far from what fundamentals would suggest for a trillion-dollar company, Tesla's latest numbers do spark some optimism, indicating that the worst is likely behind it—at least in terms of the core auto business. Given the plethora of headwinds faced during the difficult Q2 - both internally and on the macro front - margin deterioration appears to have come in at the lower end of the curve. When combined with improving cyclical demand dynamics in markets like China and parts of the US, this suggests that full-year results might not be as dire as previously expected following the disastrous first half of the year. This also shows that the company has weathered the tariff storm somewhat better than initially projected, optimizing the production/delivery equation in the US. While it remains unclear how much of a hit regulatory credits will take in Q3, it's evident the company will need to continue refining its production strategy elsewhere to better navigate the second half. From this perspective, recent product announcements are aligned with those strategic needs—particularly around the highly anticipated Model 2. With Tesla entering the Indian market and working to regain ground in China, we view this as a potential game-changer for H2. All things considered—and while we're still a ways off from seeing true fundamental support for the current share price—the outlook for the core business is looking somewhat better. This could continue to support Tesla's long-term transition into a fully AI/robotics-driven company, which appears to be where Musk is placing his bets." (Compiled by Reuters NewsEditing by Matthew Lewis)

Trump's 'massive' deal with Japan is giving US automakers heartburn
Trump's 'massive' deal with Japan is giving US automakers heartburn

Politico

time5 minutes ago

  • Politico

Trump's 'massive' deal with Japan is giving US automakers heartburn

And Elon Musk's Tesla on Wednesday posted another quarter of meager profitability and revenue, in part due to the tariffs. Tesla said its profitability decreased for the quarter because of lower regulatory credit revenue, a decline in vehicle deliveries and a lower cost per vehicle due to 'mix and lower raw materials partially offset by lower fixed cost absorption and an increase in tariffs.' Those losses will be tougher to swallow if other major trading partners succeed in negotiating better tariff rates for their own automakers. Reuters reported Wednesday that stocks in Japanese car companies Toyota and Honda soared on the news of the deal, but so did shares of South Korean and European carmakers, as hopes rise that their leaders could strike similar deals. Trump's auto tariffs have been a sticking point in trade negotiations with the EU for months, with Germany vocally pushing the 27-member bloc to make major concessions to Trump in hopes of winning a reprieve for its large auto manufacturing sector. 'The costs for our companies are already in the billions — and the sum is growing every day,' said Hildegard Müller, president of VDA, the German automobile association, which represents companies such as Volkswagen, BMW and Mercedes. 'The damage to the previously functioning supply chains is enormous and must not be allowed to increase any further.' German auto companies are reporting double-digit declines in exports to the U.S. in April and May, and they aren't the only ones. Volvo, the Swedish car company, has had to pause sales of some of its cars in the U.S. South Korean car companies Hyundai and Kia will announce their second quarter financial results later this week and both companies are projecting significant losses from the tariffs, as well. Auto exports from South Korea to the U.S. have exploded over the past 20 years, from $8.7 billion in 2005 to $37.3 billion in 2024, according to data collected by the Census Bureau. As with Japan and the EU, the duties have been a focal point of trade talks with the Trump administration, which has grown frustrated by the lack of progress. Trump sent a letter to new South Korean President Lee Jae-Myung on July 7 threatening a 25 percent tariff on all its exports to the U.S. — a sign of dissatisfaction with the state of the talks. (He sent a nearly identical letter to Japan's prime minister the same day.) After imposing the auto tariffs this spring, the administration assured American automakers that they would not become a bargaining chip in other trade negotiations, a person familiar with discussions between the administration and Detroit's 'Big Three' auto companies, granted anonymity because of the sensitive nature of the talks, told POLITICO at the time. The president sought to cast the UK deal, which reduced duties on auto and auto parts to 10 percent for the first 100,000 cars entering the U.S., as an exception. 'I won't do that deal with cars' for other countries, Trump said when announcing the terms of negotiation on May 8. The British auto brand Rolls-Royce is 'a very special car and it's a very limited number, too. It's not one of the monster car companies that makes millions of cars,' he noted, although some British brands like Land Rover compete with American SUVs. A White House official, granted anonymity to discuss the trade talks, struck a similar note on Wednesday, downplaying the prospect that Trump will agree to lower the car tariffs for any more countries. 'It's a negotiation,' the person said, pointing to the $550 billion investment Japanese businesses pledged as a sign that the country had made an unparalleled offer. In Japan, embattled Prime Minister Shigeru Ishiba celebrated the agreement, saying it was focused on 'prioritizing investment over tariffs.' But others were less enthusiastic about the outcome, given the double-digit tariff rate still hitting Japanese goods. 'If 15 percent is applied to autos and auto parts, Japan did not get what it was aiming for,' said former Japanese Vice Minister Tatsuya Terazawa. Ari Hawkins contributed to this report.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store