Latest / Elon Musk Podcast / Musk Says xAI Will Ship an AI-Generated Game by 2026 - EP#1184

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Musk Says xAI Will Ship an AI-Generated Game by 2026 - EP#1184 · Elon Musk Podcast

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  now would help the show tremendously.
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  Thank you so much. Elon Musk's AI company XAI, is
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  building a video game studio. Not a traditional studio that
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  happens to use AI tools, A studio where AI is the entire
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  point. Now, the company posted a public
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  call for developers this week asking for people who want to
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  build games from first principles, with artificial
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  intelligence at the center of every direct decision.
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  Anna Musk has said that the studio will release its first AI
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  generated game before the end of 2026 is very close.
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  This is also a very different approach than anything that the
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  major publishers are doing right now.
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  And whether it works or not, it signals something important
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  about where AI and gaming might be headed.
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  XAI has been hiring for this project since at least October.
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  Job listings have appeared for game developers and what the
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  company calls video game tutors. People paid 45 to $100.00 an
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  hour to train Rock on game design, concepts, mechanics, and
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  also storytelling. And the studio is not fully
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  structured yet. It appears to be in the early
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  stages of assembling A-Team, but Musk has been telegraphing this
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  move for over a year and now it appears to be absolutely real.
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  So today we're going to walk through what XAI is actually
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  building, how it compares to what Microsoft and NVIDIA are
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  actually doing, what this could mean for the gaming industry,
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  and why some people are very skeptical about this approach
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  right after this break. Now, this announcement started
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  on X Musk's charity post confirming that XAI is hiring
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  for video games. In response to a user who posted
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  an AI generated clip of what looked like a military shooter,
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  Musk wrote that this XAI game studio will release a great AI
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  generated game before the end of next year.
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  That is the timeline, the end of 2026.
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  A fully AI generated game that Musk is already calling great
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  before any of it even exists. And what actually does AI
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  generated mean in this context? Means the game's worlds,
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  characters, dialogue and challenges would be created
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  dynamically by the AI rather than pre scripted or written by
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  human developers. Traditional games have fixed
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  content. Every player sees pretty much
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  the same levels, same enemies, the same story beats.
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  An AI generated game could theoretically create unique
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  experiences for every single player, with environments and
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  narratives that evolve based on you and how you actually play.
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  XAI says it wants to build games from first principles, and that
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  phrase keeps appearing in the job postings and public
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  statements. This suggests the company is not
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  interested in layering AI onto existing game development.
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  Pipelines wants to start from the beginning, from scratched
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  with AI at the core, and developers who joined would be
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  building tools and systems that do not currently exist.
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  Everything is new. This is research and development
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  wrapped in a consumer product, and Musk first floated the idea
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  back in 2024. About November, he posted on X
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  that too many game studios are owned by massive corporations
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  that XAI would start an AI game studio to make a games great
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  again. Now, that framing was political,
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  of course, aimed at what Musk perceives as ideological
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  influence in mainstream game development.
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  But the underlying bet is the technology.
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  Can generative AI produce games that feel coherent and gauging
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  and you actually want to play them?
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  I mean, I'm a gamer. I play games for hundreds of
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  hours sometimes, sometimes thousands of hours over the
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  course of years. And when Elon says that he
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  doesn't want massive corporations in charge of the
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  games, think about his legacy. All of his companies, they work
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  together. XAI is 1 arm of everything but
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  Grok and X and SpaceX and Tesla, they all work together.
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  But you know, can all of this be done by XAI?
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  And is it actually worth playing?
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  We don't know. That's what we're trying to
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  answer here. And we're going to see hopefully
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  by the end of 2026, if that's going to be a thing.
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  Now, XAI is not the only company experimenting with AI in games.
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  Microsoft launched a browser playable version of Quake 2 this
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  year using the Muse AI model. The demo is old school.
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  It runs a 640 by 360 res and generates every frame in real
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  time based on player input. You can move, shoot, and
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  explore, and the AI creates the visuals on the fly.
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  Microsoft says it trained the model on about one week of
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  gameplay data, down from the seven years of data required for
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  earlier versions. It's pretty rough though.
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  The enemies seem to be blurry. The world's don't really connect
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  well. Frame rate hovers around 15
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  frames per second, which is pretty horrible in today's, you
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  know, 300 plus frame rates with some games.
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  But it works. You can play inside the model as
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  Microsoft describes it, inside of a browser.
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  Phil Spencer, who's the head of Microsoft Gaming, has talked
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  about using this tech for game preservation, allowing old
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  titles to run on modern hardware without needing the original
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  source code or the engine. Because languages change over
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  time. JavaScript has changed, HTML has
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  changed. For me, I'm a front end coder,
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  so I see those things change. All the other languages change
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  and evolve, so having these old titles be available forever,
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  that would be kind of cool. And NVIDIA is pursuing a
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  different angle, though it's ace for a game system focuses on
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  creating AI driven digital humans, characters that can
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  respond dynamically to player input with realistic speech and
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  behavior. The goal is NPCS that feel like
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  people. They remember what you say to
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  them. They react to your choices in
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  ways that feel natural rather than scripted.
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  And also, Roblox has rolled out a tool called Roblox Cube that
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  helps developers build games using generative AI.
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  Google's DeepMind has experimented with world models
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  that can generate playable 3D environments.
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  Genie 2, their latest system, creates interactive 3D worlds
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  from text prompts. And the technology is advancing
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  on multiple fronts. So what makes XA is approach
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  distinct is the scope of ambition.
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  Microsoft is treating Muse as a research project and a potential
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  just a tool for prototyping a game preservation.
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  NVIDIA is focused on character behavior.
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  Roblox is giving developers more tools.
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  XAI is saying it will ship a consumer facing game built
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  entirely by AI within roughly 18 months.
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  That is crazy. Little bit of time here, like
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  under a year basically for them to develop and build this whole
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  game. And it could be a short game,
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  like a 30 minute game. I mean that that's a game,
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  right? Is there going to be a
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  multiplayer part to it? We don't know.
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  He didn't say anything about it in earnest, but it puts the
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  company in a different category of risk and expectation
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  considering what they're going to be doing.
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  The global video game market is projected to exceed $600 billion
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  by 20-30. AI is increasingly used in story
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  design, character development, procedural content generation,
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  and quality assurance testing. Now, a recent Google Cloud
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  survey found that 87% of developers are now using AI
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  agents that adapt to players in real time.
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  The industry is already moving in this direction.
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  The question is whether XAI can leapfrog others and deliver
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  something genuinely new and actually good that you want to
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  play. Think about it like this.
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  Strong AI tools are helpful but do not replace people because
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  you need leadership for things like this.
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  It's a complex problem to solve, right?
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  The creative people to drive those storylines.
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  Generative models can produce content quickly and I mean we
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  all use chat 2BT, right? You can create anything within
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  seconds, but that content may not connect with players the way
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  the human crafted experiences do.
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  The game needs to feel intentional and needs to feel
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  like you need to feel something. It needs pacing just like a
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  movie, just like a show. Emotional arcs just like a movie
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  in a show. Moments of surprise and tension,
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  laughter, humor, things like that.
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  And we all know that Chiat TPD has no humor.
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  It does. It's not good at it.
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  And, you know, it can make some OK stories, but for the most
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  part, it's very basic. And Xai and Croc hasn't shown
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  anything meaningful in that regard either, You know, more
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  meaningful than something like Chattibeti or Clod or anything
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  like that. Now, whether AI can deliver
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  those quantities at the level that players expect from AAA
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  titles remains unproven because it hasn't been done yet,
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  especially a AAA title like Elon is talking about.
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  There's also the question of what AI generated actually means
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  in practice. Musk has shown demos of Grok
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  generating simple 2D games like Pac-Man close using JavaScript.
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  These are basic implementations generating a polished 3D
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  experience with physics narratives.
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  Cohesion in visual fidelity is orders of magnitude harder.
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  Musk has said XAI is working on integrating photorealistic
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  graphics into AI games, but he's not explained how to do it.
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  The gap between a proof of concept in a shippable product
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  is quite vast. So think about this legacy.
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  Hollywood studios have spent the last few decades on trying to
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  build lifelike, photorealistic people in their movies, and even
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  the AAA titles of today. There's still some sort of thing
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  going on with their faces and their lips and their eyes that
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  see uncanny valley. You can't Unsee it either.
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  Now, the gap between a proof of concept for Elon in a shippable
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  product is huge. It's about a year away,
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  according to Elon. Now, is this another one of
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  Elon's promises that won't actually happen?
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  We're going to wait and find out, I guess.
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  And XA is gaming push also is a pretty big strategy here.
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  The company is trying to find a consumer application for Grok
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  beyond the chatbot on XA. Successful game would
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  demonstrate that Grok can do more than answer questions.
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  It can also create gaming experiences.
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  It can entertain you. That would differentiate XAI
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  from Open AI, or Anthropic will focus primarily on productivity
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  and enterprise applications, as well as Google.
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  You know, the whole Google suite with Gemini.
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  And gaming is a different market with different success criteria.
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  If XAI can crack it, the implications extend well beyond
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  entertainment. EA, Take Two Interactive,
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  Ubisoft and other major publishers have invested heavily
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  in traditional development pipelines.
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  They employ thousands of artists, writers, designers and
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  engineers. And if AI can meaningfully
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  accelerate or replace parts of that workflow, the cost
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  structure of the industry could shift dramatically.
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  Smaller teams might be able to compete with larger studios now,
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  and development cycles could shorten.
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  The balance of power between publishers and independent
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  creators could completely change.
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  There might not be any more gatekeepers, but none of it is
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  guaranteed. EI gaming is very early and the
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  technology produces impressive demos, kind of, but has not yet
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  delivered anything commercially that's any good.
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  XAI is betting it can change that within about a year, maybe
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  2. Musk has a track record of
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  setting aggressive timelines and sometimes a lot of the times
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  missing them. And SpaceX was supposed to send
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  humans to Mars in 2024. I had thousands of people
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  working on the the Red Planet in 2020 according to Elon, years
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  and years ago That didn't happen.
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  Tesla's full self driving has been coming next year for many
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  years now. Musk also has a track record of
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  eventually delivering things that seemed impossible.
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  Reusable rock is like the Falcon 9 and now Starship.
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  Starship's not quite there yet, but it will be E VS at scale.
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  Tesla, everything at Tesla and also global satellite Internet.
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  He's delivered all those things. Not full self driving, but E VS
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  at scale. Not complete starships yet, but
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  definitely Falcon on reusable rockets which paved the way for
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  future missions to Mars. Now the gaming industry will be
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  watching all of this from afar because XAI is just a little guy
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  right now. They're not worried about Elon.
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  They're not worried about XAI. They have their pipelines that
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  they have to fulfill. They're going to implement their
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  own AI technologies and what I think is going to happen, which
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  I believe this is happening with vehicles as well, is the hybrid
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  approach. Nobody's ready to really
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  completely switch over to complete battery power yet for
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  vehicles. Not a major chunk of the
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  population yet. All right?
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  So there's going to be ICE vehicles, there's going to be E
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  VS. And then there's going to be
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  something in between, which is a hybrid, which is the safety of
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  an ICE vehicle because you're not going to run out of gas.
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  And also the luxury of an EV where it's quiet, it's nice, and
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  you don't have to worry about using gas for your car, you just
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  charge it at home. It's nice, right?
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  It's a nice thing to have. So I think that's what's going
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  to happen with most of these studios is they're going to
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  continue doing what they're doing, but add AI elements to
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  it, sort of like what enterprise coding has done.
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  So everything that's like lower level in the gaming studios will
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  be replaced by AI. Eventually AI will be able to
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  create the code for a base layer for a game, but eventually those
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  middle layers will also be taken away.
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  So middle coders have been taken away from front end web
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  development for a while now. Beginners, good luck.
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  You're not going to you're not going to find anything list with
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  the it's maybe a local studio. That's about it.
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  Right now you can't find anything in the the big Fang
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  companies anymore have for starters.
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  And also eventually the higher levels too, because AI will
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  figure out a way to take your job too.
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  And above that there's going to just going to be prompters,
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  etcetera, that'll be doing the work.
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  That'll be like, hey, create me a game that does XYZ, create me
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  a game a mix between Battlefield and also Roblox.
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  Like that's cool, that'll be fun, but also adds Minecraft
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  elements to it, blah, blah, blah, you know, whatever they
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  want to do. There's so many different
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  options. But also throw in Pac-Man,
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  that'd be interesting. So AI gaming market is expected
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  to grow from 3.2 billion now to 59 billion in 10 years.
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  According to Dimension Market Research.
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  It's an 18 fold increase in about 10 years.
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  Now, whoever figures out how to make AI generated games work
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  could capture a large amount of that market now.
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  Musk has called this effort an attempt to make games great
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  again. Definitely political.
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  Whether that happens depends on execution and the code will
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  either work or it won't. We might get a small demo by the
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  end of 2026. I think it'll be pretty fun to
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  have a like a 10 minute demo that'll be great.
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  No amount of hype though can substitute for a product that
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  players actually want to spend time with.
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  XAI has to deliver by the end of 2026.
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