Confusion Clouds xAI-Kalshi Team-Up After Mixed Messages

Elon Musk’s AI company xAI and predictions markets platform Kalshi seemed ready to join forces until they backed away from the announcement, leaving people wondering about the deal’s current state.

Kalshi Retracts xAI Deal Shortly After CEO Confirmation

Bloomberg first reported the news, and Kalshi’s CEO Tarek Mansour confirmed it on Musk’s social network X (formerly Twitter). The team-up planned to give Kalshi users AI-powered insights for their bets on real-world events. xAI was set to use its advanced language models, trained on X content, to study news stories and past data, offering predictions on topics ranging from elections to central bank choices.

Kalshi, a platform that lets people bet on event outcomes, had plans to use xAI’s tools in all its market contracts. This move was seen as a big leap to bring prediction markets into the mainstream by using the latest AI technology. Both firms were ready to put a lot of their top engineers on this project.

However, just hours after they shared the news, Kalshi backed off. The company put out a statement saying they had not yet agreed on all the details with xAI. This led Bloomberg to take down its first article, and Mansour erased his earlier post about the team-up.

xAI and Kalshi did not say more about whether they still plan to work together or have dropped the idea. This lack of clarity has people guessing about how these two companies relate, given their political connections.

Political Ties and Regulatory Heat Shadow xAI–Kalshi Deal

xAI and Kalshi both have links to key people from former President Donald Trump’s circle. Donald Trump Jr. sits on Kalshi’s advisory board. Brian Quintenz, who Trump picked as a commissioner for the Commodity Futures Trading Commission (CFTC), is on Kalshi’s board of directors. In addition, Eliezer Mishory, who used to be Kalshi’s general counsel, now works in Musk’s Department of Government Efficiency. This department, which some find controversial, has become known for its tough cost-cutting measures.

The clash happens at a crucial moment for Kalshi, which has attracted regulatory attention in multiple US states because of its sports-related contracts. The company is also growing its reach through team-ups, like a recent agreement with Robinhood to build prediction markets into its app.

For xAI, this follows a big step forward: Microsoft Azure’s cloud setup now hosts the company’s Grok AI models. The firm’s quick expansion, supported by billions from global investors, has made it a key player in the AI world.