Elon Musk announced on his X platform that xAI’s “Imagine” video and image generation feature is profitable, contrasting with OpenAI’s recently shut down Sora, which lost roughly $1 million per day.
Musk’s comments indicate potential viability for AI video generation despite economic challenges in the sector. The closure of Sora on March 24 illustrates the competitive landscape, as OpenAI shifted its resources to productivity tools.
Musk emphasized that understanding and generating video is critical for achieving Artificial General Intelligence (AGI), stating “photons” are the highest-bandwidth form of communication. He noted that Imagine has a positive gross margin, asserting, “these are essential tools for AGI.”
OpenAI’s Sora peaked at around one million users, which declined to under 500,000 before its discontinuation. The application generated only $2.1 million total revenue while incurring daily costs of approximately $1 million, according to reports from the Wall Street Journal and TechCrunch.
While Musk did not disclose specific figures for Grok Imagine, he framed its profitability as evidence of commercial potential in the AI video sector. Grok Imagine is accessible to X Premium subscribers and via an API launched earlier this year.
Musk reaffirmed his belief that AGI could be achieved by the end of 2026, a sentiment echoed during his address at Davos. He anticipates the public beta of the Grok 5 model to occur in early 2026, equipped with six trillion parameters for real-time video capabilities.
The contrasting trajectories of xAI and OpenAI highlight significant economic hurdles in AI video technology. Musk indicates continued investment in Grok Imagine despite competitor setbacks, stating the next release “will be epic.” Earlier reports indicated xAI faced scrutiny over sustainability, estimating losses at $1 billion monthly before its acquisition by SpaceX, which combined the entities to a valuation of approximately $1.25 trillion.
