Microsoft strikes deal with Musk to host Grok AI

Microsoft Chairman and CEO Satya Nadella during the Microsoft Build 2025, conference in Seattle, Washington, on May 19, 2025.
[AFP]

Microsoft on Monday said its cloud servers will now host Grok from Elon Musk's xAI, days after the chatbot went off the rails with talk of "white genocide" in South Africa.

Musk told an event hosted by Microsoft that his company's models "aspire to truth with minimal error," adding that "there's always going to be some mistakes that are made."

The Grok chatbot last week ignited controversy by answering unrelated user prompts with unbacked right-wing propaganda about purported oppression of white South Africans.

In a recorded conversation with Microsoft CEO Satya Nadella, Musk said that xAI would always acknowledge mistakes with its Grok AI models.

"It's incredibly important for AI models to be grounded in reality," the Tesla tycoon said.

Generative AI models are often pre-programmed by engineers -- through things known as system prompts -- to give or avoid specific responses or convey certain moods or styles, no matter the input given by the user.

Most recently, the latest model from industry leader OpenAI was found to be generating overly sycophantic responses, and the company quickly said it would make changes to remove the bug.

The answers provided by Grok drew alarm as they reflected a conspiracy theory often shared on social media by Musk, who was born in South Africa.

The company did not identify who made the code change, but said an "unauthorized modification" directed Grok to provide a specific response that "violated xAI's internal policies and core values."

Faced with criticism, the startup said it was implementing measures to make Grok's system prompts public, change its review processes and put in place a "24/7 monitoring team" to address future incidents.

While not specifically referring to the incident, Musk told the Microsoft event that xAI will practice transparency when mistakes are made.

This could be interpreted as a dig at archrival OpenAI, the creator of ChatGPT, which is Microsoft's main partner to build its in-house Copilot models.

OpenAI, which was co-founded by Musk in 2015, is often criticized for keeping its technology's internal workings secret, as opposed to more open models like Meta's Llama or the technology from Chinese company DeepSeek.

OpenAI CEO Sam Altman also appeared remotely at the Microsoft Build event in Seattle, speaking in a live Q&A with Nadella in which the two tech leaders vaunted the latest developments in their joint partnership.

The Grok models from xAI will be available on Microsoft's Azure AI Foundry, a platform that makes hundreds of models available for paying developers to build their own generative AI models.

The platform gives users access to popular models from various creators such as OpenAI, DeepSeek, Mistral, Meta, Stability AI, and now xAI.

AI tools for writing software code are rapidly evolving into "agents" that can assist developers, according to the Microsoft chief.

Some 15 million developers have used Github CoPilot AI to code or troubleshoot at the Microsoft-owned platform, the company said.

"This is one of the biggest changes to programming that I've ever seen," Altman said during his exchange with Nadella.

"This idea that you now have a real, virtual teammate, that you can assign work to."

Microsoft last week said it was slashing unnecessary layers of management and seizing the benefits of new technology as reports said the tech behemoth was laying off thousands of workers.

The tech giant did not disclose the total amount of lost jobs but US media reports said it will amount to about 6,000 people or about three percent of its global workforce.