Elon Musk's xAI and prediction markets operator Kalshi have reached an agreement that will introduce Grok, an AI chatbot utilized on Musk's X social media platform, to the realm of event contracts.

About two months after Kalshi co-founder and CEO Tarek Mansour prematurely announced a deal between the two businesses, the agreement was revealed Thursday on the xAI X stream.  The artificial intelligence (AI) technology that powers the popular Grok and Grok 3 API tools is called xAI, and it belongs to Musk.

“Effective immediately, Kalshi and xAI are partnering to bring Grok to prediction markets,” according to the xAI X feed. “Two of the fastest-growing companies in America are now on the same team.”

Musk established xAI in 2023.  The AI firm paid $45 billion in March to acquire the social media platform X, which included $12 billion in debt that Musk had taken on to purchase the business that had been known as Twitter.  The union is thought to enhance Grok's artificial intelligence capabilities.

“xAI and X’s futures are intertwined,” Musk, who also runs electric vehicle maker Tesla and SpaceX, wrote in a post on X in March. “Today, we officially take the step to combine the data, models, compute, distribution, and talent.”

Kalshi's xAI Deal Is Essential

Following the introduction of Grok's fourth edition earlier this month, news of the xAI/Kalshi partnership surfaced.  Grok's enhancements might boost Kalshi's platform integration.

According to the prediction markets operator, the AI union will make it possible for it to examine data from X more effectively and turn it into trading signals and summaries that traders can use to make quicker, better judgments.

“What once seemed crazy is now obvious,” wrote Mansour in a LinkedIn post. “When we launched Kalshi, people thought we were nuts. Today, prediction markets are one of the most powerful tools for understanding the world… AI will be critical to the evolution of prediction markets.”

According to analytics site Apptopia, the agreement with xAI could attract more people to Kalshi at a time when daily active usage and app downloads are on the decline.  That's probably because it's a sluggish time for US sports and because it's difficult to compare to the period preceding the 2024 presidential election.  Despite Kalshi's assertions that it is not a sportsbook operator, sports contracts are one of the most traded derivatives on the platform.

The Kalshi xAI Deal Boosts Competition in the Polymarket

With Polymarket reaching a similar arrangement with X last month, the predict markets company's competitiveness is further heightened by the xAI/Kalshi cooperation.  With Polymarket's impending return to the US, its competition with Kalshi is probably going to intensify.

"The X-Polymarket partnership, announced June 6, 2025, integrates Polymarket’s prediction market platform into X, allowing users to bet on event outcomes like elections or sports using cryptocurrency,” according to a Grok response to an X user query. “This could enhance engagement, offer real-time insights, and enable potential earnings for accurate predictions. However, concerns include gambling-like risks, regulatory hurdles, and accessibility for non-crypto users.”

Shayne Coplan, the founder of Polymarket, claimed in a recent CNBC interview that his business is the first in the industry and that Kalshi is a replica.