Musk’s xAI Teams with Kalshi to Power Prediction Markets

Elon Musk, the wealthiest man on the planet, with an estimated net worth of $424.7 billion, has found a new favorite hobby following his departure from the Department of Government Efficiency amid his feud with President Donald Trump.

The magnate best known as Tesla, SpaceX, and X boss is ready to cross yet another frontier by joining the prediction markets trend.

Last week, xAI, the artificial intelligence firm founded by the 54-year-old, announced a new partnership with Kalshi, a U.S.-based platform that offers users the opportunity to wager on a plethora of real-world events. 

“Excitement Only” From Kalshi

The deal brings xAI’s chatbot, Grok, onto Kalshi’s platform to provide users with insights and context on market trends and price fluctuations. It’s the second such move in as many months, following June’s xAI team-up with Polymarket, one of Kalshi’s key competitors.

Kalshi, which grabbed attention with an AI-generated commercial aired during the NBA Finals, said Grok will help explain changes in betting odds across various prediction markets. 

The company didn’t address Grok’s recent controversies,  which include promoting antisemitic content and offering unsolicited commentary on racially charged topics, but issued a brief comment: “Kalshi’s feelings about the partnership are excitement only.”

Prediction markets function like betting platforms, with odds that shift in real time as users place money on different outcomes. Supporters believe they harness the “wisdom of the crowd”. Similarly, Musk strongly believes in their accuracy, saying they outperform traditional polling since they involve actual financial stakes.

“People Don’t Lie When Their Money Is Involved.”

Trading platforms like Robinhood and Interactive Brokers are also no strangers to prediction tools. 

Kalshi chief executive officer Tarek Mansour told the Motley Fool in April that the best way to forecast the future is to use skin in the game. “People don’t lie when their money is involved.”, Mansour argued. 

A promotional video for the xAI-Kalshi partnership featured Grok summarizing market odds on whether Elon Musk would launch the America Party in 2024.

Regulators have taken notice. The Commodity Futures Trading Commission (CFTC), which oversees such markets, hasn’t commented on the implications of Musk’s chatbot influencing platforms that allow bets on Musk-related events. Neither has Polymarket.

Prediction markets offer an almost endless list of bets, from celebrity breakups to geopolitical conflict. Earlier this week, over $7 million was wagered on Kalshi and Polymarket over speculation that Astronomer CEO Andy Byron would step down following a viral kiss cam incident at a Coldplay concert.

Polymarket became a hotbed of activity during the 2024 presidential race, with users placing massive bets, including one individual who wagered $28 million on Donald Trump. Total trading volume on the election approached $3.7 billion.

Polymarket CEO Shayne Coplan said Wednesday on CNBC, “A lot of people want peace of mind… now that there’s this other data point, which is the Polymarket.” Despite its popularity, he added that Polymarket was not profitable.