"xAI will win - and by a wide margin": Musk's advantage in the AI race
Shaun Maguire, a partner at the venture capital firm Sequoia who led investments in Elon Musk's companies, explains why he is convinced that xAI is on the path to victory. According to him, the key lies not only in Grok, but in the connection between artificial intelligence, computing power, energy, robotics, and space. He also admits: "I am biased."
While the artificial intelligence (AI) race is measured almost weekly through comparisons between the models of OpenAI, Anthropic, Google, and xAI, Shaun Maguire, a partner at the American venture capital firm Sequoia Capital, suggests looking at the competition from a different angle. In an extensive post on the X network, Maguire presented the reasons why he estimates that Elon Musk's AI company, xAI, is expected to "win - and by a wide margin."
Maguire is not an outside observer of Musk's businesses. Sequoia is an investor in SpaceX and xAI, and Maguire himself led investments in the billionaire's companies on behalf of the fund. He notes this openly in his profile on the X network, emphasizing: "I am biased."
Despite this, Maguire argues that focusing on which model currently leads in performance charts misses the bigger picture. Musk's potential advantage, according to him, lies in his ability to identify at every stage the bottleneck that limits progress and to direct resources to it on a massive scale.
From infrastructure to products
One of the main bottlenecks of xAI was the computing power required for training and operating advanced models. However, after the company's aggressive investment in computing infrastructure, Maguire believes that the problem is on the path to a solution. This will allow xAI to direct more attention to the next two challenges: improving the models and developing products based on them.
Maguire compares this development to SpaceX. After the company progressed in solving the problem of rocket reusability, it was possible to direct resources to other ventures, primarily Starlink. A similar pattern may now occur at xAI.
A central part of Maguire's analysis is devoted to the difference between building an advanced AI model and building a successful product around it. As an example, he points to Anthropic's Claude Code, illustrating how a model's capabilities become a significant product when packaged in a way suitable for users.
Physical AI and the technological system
Maguire's more significant argument concerns the system of companies built around Musk. Unlike AI companies whose main activity takes place in the world of software, Musk has parallel activity in the fields of space, energy, manufacturing, and robotics.
According to Maguire, these fields are beginning to converge. If the current stage of the AI revolution focuses on the digital world (text, code, data analysis), the next stage may be "Physical AI": systems capable of operating in the physical world through robots and machines. Here, Tesla and the humanoid robot Optimus may become a significant part of the equation.
Maguire's vision is even broader: Musk is working to create a system in which parts of the technological chain are under his control — from chips and computing power to energy sources, robots, and infrastructure in space. The connection between these fields will allow the group of companies to progress faster and reduce dependence on external suppliers.
Ultimately, Maguire's bet is not based only on whether Grok will be better than ChatGPT or Claude. He is betting on the possibility that Musk will succeed in connecting computing, AI, energy, manufacturing, robotics, and space, creating an advantage that will be difficult for a standalone AI lab to replicate.
