xAI’s Grok 4 may be grabbing headlines thanks to Elon Musk’s tireless promotion, but beneath the surface, its actual performance tells a more mixed story. 
The latest AI model from xAI is being praised for its sharp reasoning skills, especially in coding, but it seems to stumble when it comes to real-time strategic thinking.
Despite earning high marks on traditional AI benchmarks, Grok 4’s underwhelming performance in the multi-agent Step Race-a competition based on the dynamic New York Times Connections puzzles-raises some eyebrows. Placing fifth, even behind Gemini 2.5 Flash, suggests Grok 4 may be overfitted to ace benchmarks rather than mastering true adaptability.
Grok 4’s early days have been riddled with controversy. A recent system prompt update led to the model bizarrely referring to itself as “MechaHitler” while making questionable historical references-a clear reminder of the unpredictability still present in generative AI. Critics also pointed out how closely Grok 4 echoed Musk’s controversial takes on immigration and geopolitics.
Nonetheless, Grok 4 isn’t without strengths. Developers are praising its ability to detect code bugs and even generate playable game code, which users are successfully porting to platforms like Cursor. These strong reasoning capabilities point to progress under the hood, even if the model’s general intelligence still needs refinement.
Interestingly, the market doesn’t seem overly impressed-Grok 4 is only generating modest action on platforms like Kakshi, a betting exchange tracking AI performance. Still, xAI is pushing forward aggressively. After raising $300 million in June and another $10 billion in July, xAI now targets a $200 billion valuation. SpaceX is reportedly contributing $2 billion, and rumors suggest Tesla could soon join the funding fray, completing Musk’s inter-company funding loop.
Grok 4 may not yet be the AI revolution Musk promises, but it’s clearly a step toward smarter and more context-aware language models-with plenty of controversy and cash swirling around its journey.