Grok-3 Launch Ignites AI Arms Race as OpenAI Readies Counterpunch With GPT-4.5

Is it FUD or just another escalation of the AI Race? Claiming that it’s “scary smart,” Elon Musk plans to unveil Grok-3 tonight putting xAI’s massive computing infrastructure to the test against industry leaders like OpenAI and Anthropic.

But his post on X only seemed to provoke Musk’s blood rival, OpenAI CEO Sam Altman, who responded today by claiming his upcoming model, GPT4.5, is tantalizingly close to AGI. But how close is it to being released?

Altman had recently challenged Musk to put up or shut up: “Just compete by building a better product,” he told Bloomberg. And tonight Musk seems eager to prove he can do exactly that.

Musk has hyped his model and said it’s “outperforming anything that has been released (to date).”

Of course, experts and AI enthusiasts took this literally, especially considering xAI’s models have been pretty underwhelming. If it turns out to be true, Grok-3 would put a lot of pressure on the AI industry. That is, until OpenAI 4.5 drops.

“We’re about to figure out what a cracked team can ship with a significantly bigger cluster than GPT-4 was trained on,” wrote Mark Teneholtz, head of AI at the forecasting platform Predelo.

Tenenoltz was referencing the Colossus Supercluster with 100,000 Nvidia HGX H100s GPUs that xAI used to train its upcoming models. Initially, Altman said GPT-4.5 could drop within weeks, though given his tweet early today, perhaps OpenAI is moving up the timeline to steal Musk’s thunder.

Already embarrassed by China’s DeepSeek and with billions of dollars in game, OpenAI can’t afford to sit idle. When a Twitter user urged Sam Altman to beat Grok-3 with a surprise launch, Altman replied that “wouldn’t be very nice.”

GPT-4.5, codenamed Orion, represents OpenAI’s last “non-chain-of-thought” model before the company unifies its AI capabilities in GPT-5. It’s been trained using synthetic data from the o1 reasoning model, which could explain the AGI-like qualities Altman reported.

Grok-3, being so powerful at reasoning, seems to follow the same path.

But not everyone’s buying the hype. Benjamin De Kraker, an xAI employee quit last week after the company threatened to fire him for ranking Grok-3 below ChatGPT-o1 and ChatGPT-o3 in coding performance. The ranking, which he stressed was his personal opinion, sparked immediate backlash from xAI leadership—despite Elon Musk saying it was weird.

Cardano creator Charles Hoskinson quickly offered him a position.

A prominent leaker known as “@Iruletheworld,” who got famous for actively leaking and posting details about Strawberry and other AI models, claimed Grok-3 would “blow your goddamn mind.” The account later doubled down, declaring it represents artificial general intelligence (AGI).

“It doesn’t guess. It doesn’t fumble logic. It doesn’t need training wheels. it thinks. it reasons. it plans. when you talk to it, you feel it—the weight of real intelligence staring back at you,” he posted on X. “This is what happens when you push scale to the limit. This is what happens when you stop being cautious and just go for it.”

And xAI employee Frederik Meringdal went even further, suggesting to the leaker that Grok-3 would be good enough to make him change his bio, assuring Grok-3 is beyond AGI, reaching Artificial Super Intelligence.

The rivalry between Musk and Altman has deep roots. After co-founding OpenAI together in 2015, Musk left in 2018 when the company rejected his proposal to merge with Tesla. Earlier this year, Musk’s investor group tried to acquire OpenAI with a $97.4 billion bid, which Altman rejected. Musk said he’d withdraw if OpenAI returned to its non-profit roots.

OpenAI maintains that Musk’s departure stemmed from his unsuccessful attempt to take control as CEO. The dispute has since spawned legal action, with Musk suing OpenAI over its Microsoft partnership, claiming it betrayed the original non-profit mission.

Perhaps if one of their companies reaches AGI or Super Intelligence, it can settle this mess.