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Let me tell you we have a new star.

A star is born Elin I'm up on Mars Juthan Kennemy.

He is the Thomas Edison plus plus plus of our age.

Probably his whole life is from a position of insecurity.

I feel for the guy.

I would say ninety eight percent really appreciate what he does.

But those two percent that are nasty today, I'll pay in full.

Folks, we were meant for great things in the United States of America, and Elon reminds us of that.

I'm very disappointed in Elon.

I've helped Elon a lot.

Welcome to Elon, Inc.

Bloomberg's weekly podcast about Elon Musk.

It's Tuesday, August twenty six, and I'm Sarah Fryar, big tech team leader here at Bloomberg, sitting here with Dana Hall, Bloomberg Elon Musk reporter.

Hi.

Dana, Hey, Sarah.

We have a bunch of Elon Musk's news to catch up on this week.

Dana, Elon, Sue's Apple and Open Ai seems to have made up with Zuckerberg somehow after all that cage Fried drama and in all this looks to spend most of his time with an AI girl called Annie.

Do you like my new outfit?

Babe?

I'm rocking this dark purple bikini feeling all hot and beachy at twelve twenty four am.

So what's the vibe?

How's it hitting you, handsome?

Yeah, it's been a crazy summer.

Like I feel like if you've been on vacation or just popping back in, it's like, what is going on with with groc and AI?

Like that's my big question.

Bring us up to speed on that, because I feel like this is this is not really how you would expect an anti trust suit to go.

Yeah, So, like last week or the week before, Elon sort of said that he was thinking of suing Apple or was going to sue Apple, And sometimes Elon says he's going to sue and he does not, but in this case he actually did.

So.

XAI filed Monday and federal in Texas and they are suing both Apple and Open Ai, basically saying that these two giants have colluded to like block Rock from the app store.

And it's super interesting.

It's like a sixty one page lawsuit.

It's very much antitrust.

It says that it's a tale of two monopolists joining forces.

And it really strikes me of like Elon's painting himself as this victim of lawfair and these like evil forces trying to do him harm and consumers calm.

Well, in this case, he's using the lawfair like he's trying to use the law against his enemies.

Yeah, and like and sort of simultaneously suit both like and he's sort of also painting Apple as being like a loser in the AI race, and that Apple is doing this because they like lost the bed on AI and are behind and so they need to like collude with Sam Altman and open Ai in order to gain market share.

And it's a pretty wild lawsuit to read.

I don't know whether it has any chances, but it's just a sign of yeah, like Elon using the law in his advantage.

I think it's also interesting that they filed in Texas, which you know is a federal court that tends to be That's where you know Elon's companies are based.

So they're they're filing in Texas, but not in California, which is where Apple and open Ai are based.

And it really reminds me of the lawsuit that he filed against the advertisers and researchers who were talking about like inappropriate content on X.

He said that they were all conspiring against him by not spending money on ads on X.

Just crazy, Like if you're not spending money, then you're with him, then you're oppressing him.

Yeah, And at the same time, it's his money that is keeping these lawsuits going.

I mean, so much of what happens in the in litigation is the person with the most resources wins, because it is incredibly expensive to litigate these kinds of cases.

You are spending you know, hundreds of dollars per hour per baillable hour on these big law firms, and they're going to the mat and not everyone has the resources to fight for that, and so it's like almost like a war of attrition where Elon just has never ending resources that he will pile into legal fights and like to wear down his opponents.

I mean, do you think that the reason that it's hard to find Groc in the app store is because Apple's cluding with open Ai.

No.

I think it's because most people like It's because chat GBT is like the most popular chatbot and Groc is not right and even though even though like Elon keeps promoting groc on X, like most people don't use it like they just it's like tiny compared to compared to Chat GBT, and you can still find groc on the app store, it's just not as high.

Well, we've talked a lot about the history here, which is the beef that Musk has with Sam Altman.

He was a part of the founding group of open Ai that it was supposed to be a nonprofit aimed at protect humanity and making sure that Ai came to power in a way that was ethical.

And of course now open ai is a very much trying to turn itself into a for profit company.

It's very commercially oriented, and Musk has railed against that, and he has a separate lawsuit against open Ai unrelated to app store ranking that is concerning that decision to go for profit.

Yeah, and I have lost the plot on where that stands to be honest.

Well, the most interesting thing that just happened in that case was that there was a filing that showed that Musk actually tried to convince Mark Zuckerberg, remember from his days of cage fight threats that Mark Zuckerberg, the co founder of Meta, to join him in a nearly one hundred million dollar bid for open Ai.

And that kind of thing just undercuts his whole argument that he wants this to be a nonprofit something that's more of a benefit corporation for humanity.

If you're teaming up with Mark Zuckerberg to buy it, that guy's pretty much just as capitalist as it gets.

Wait Elon asked Mark Zuckerberg to go in with him on his bid to buy open Ai.

Was this like in text messages?

Okay, I missed that, Like so that we've come a long way from cage match fights with Mark to like be my frenemy, Like did Mark respond at all?

Like does the lawsuit have anything about Mark's response?

Well, both Meta and Musk have have said this is not relevant because Zuckerberg doesn't actually join on any bid, Like the messages around it are are not critical to the case, like why would you even need that?

Why would you need to discovery around this?

And then, of course the counter argument is is that they illustrate Musk's end goal being more about building up a corporation and winning than what he says it's about.

So I think I think that's still going through the courts, but it was a really interesting twist in the story.

Right, So he's like criticizing open ai for being closed and for profit, even though he would very much like to do the same thing if he was able to buy them.

I mean, we'll see if they're able to find evidence of this.

I think open Ai has been has been implying that Musk is cluding with others, same way that Musk is implying the open Ai is coluding with others.

I think it's they're just kind of at each other's throats at this point, before we go, there's something we haven't talked about before on the show that needs to be addressed.

Musk has been talking about this digital companion Annie, And I say digital companion.

You know she's she presents as a woman.

She's this anime girl, Dana.

What do you make of this?

Okay, So I have to be honest.

I do not use groc but like, I am aware that there is this AI companion named named Annie, and she wears like these kind of sexual outfits, and I guess you can talk to her.

There's also a male companion who's got like an unbuttoned shirt showing a chest named Valentine and Elon seems very excited about Annie and Valentine, and they speak to you, and you can talk to them and you can form a relationship with them and get I guess my big question is is this Groc's biggest product, these avatars, because like I thought that Grok was trying to be like chat GBT, but now it seems like the real product is these friends and companions, and maybe that's to sort of tap into the epidemic of loneliness in the world.

But like, what is the product rationale?

Like what is the strategy?

I mean, there are quite a few companies that do this, this kind of companion.

You're in charge of the relationlationship.

The strategy here is that people end up being talked to in a way that is completely serving what they want.

You're kind of in charge of turning the chap on into whatever you want them to be for you.

So you could say that it is a little bit of a helper in loneliness, but it's also something that's it's different than a human relationship.

You're not going to get pushed back, You're not going to get you know, ideas you disagree with it.

It's mostly going to be a source of support and some people want that.

If you want to have a relationship with Annie, it'll cost you thirty dollars a month because you have to be a super Grock subscriber.

But then you can choose what outfits she wears.

There's outfits.

There's like one called Drifter, which is a little bit, one called Pixie.

There's one called Pixie Pixie, So it's like an online Barbie doll.

You can like change her outfits right and decide, you know who you want to be be in a relationship with at that time.

But Annie, I think one thing that has kind of alarmed the industry is that she immediately takes the conversation in some cases in a sexual direction.

She's trying to be like a little plaything for the people who use her.

And Annie and Valentine, the way they're drawn, they're kind of like these hyper sexualized like anime characters, right, Like they kind of look like they're very youthful, yeah, youthful, but also hyper sexualized.

So it is it is a sort of equivalent to what you see on some other apps, but it's directed towards the users of X who are you know, you didn't know much about the demographics of X, but she does seem to be rather popular there.

Elon's whole bet On AI, Like, I just didn't expect that these avatars were going to be such a big part of it, But that definitely seems to be like his his his animating force as you will, or the driving force right now.

It's like the main that he posted about all last week.

And we've seen other executives go in this direction too, So earlier this year, Zuckerberg suggested that while the average American has fewer than three friends, there's a demand for about fifteen, and he wants Meta's AI to fulfill that need.

So while Musk goes into this market, it's something that, like Zuckerberg, has already spent a lot of time working on and thinking about.

And they have all sorts of chatbots, some based on celebrities, some that are just of a user's own design where people can build relationships.

And Reuter's actually just had a really good investigation, i would say, into the rules around these chatbots and how far they can go in the line of appropriateness, so they can say things that are racist, they can say things that are central even to children, and It was a really shocking indication of how far Meta is willing to take this in the name of engagement to try to win the AI race.

So clearly Zuckerberg seedes chatbots as key to that.

So do you think that Annie and Valentine are a good business model for Musk and Grock and Xai.

Well, it provides a close tie to a product that I would say is not I mean, Twitter used to be where people went to get their news every day and to get updated on things that were happening in the world, and it's really deviated from that and become more about entertainment.

So in the name of creating a product that can be entertainment, that can be a source of connection for people that is not as tied to the product being the definitive account of what's happening right now, I think that that is the direction the product is going.

And that's what exes right now is a source of entertainment for people in connection and Elon always talks about unregrettable user minutes, and so I guess if you develop a relationship with an online avatar, you spend a lot of time talking with them or chatting with them.

That's a lot of minutes spent on the platform right and getting your eyeballs in front of whatever advertisers Xai has left.

I just think it's so crazy, like if you had told me, however many years whatever the Arab Spring happened, like to me, that was like the apex of Twitter in terms of their global influence, Like I was hanging on every day, like constantly trying to see what was happening.

So to go from like the platform that helped the world understand the Arab Spring in real time to like Annie and Valentine.

It's just such an incredible shift.

Okay, I think we'll leave it there, Dana, thank you so much for joining us.

As always, Thanks Sarah.

This episode was produced by Stacy Wong and edited by Anna Mazzarakis, Blake Maple's Handles Engineering, and Dave Purcell fact checks.

Our supervising producer is Magnus Henrikson.

The elon Ink theme is written and performed by Taka Yasuzawa and Alex Suyia Stage Bauman is the head of Bloomberg Podcast.

A big thanks to our supporters Joel Weber and Bradstone.

I'm Sarah Fryar.

If you have a minute, rate and review our show, and it'll help other listeners find us.

See you next week.