TDP #48: Can xAI Realistically Challenge Google and OpenAI?

See what's trending—before it happens.

Aug 01, 2025

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✍️ Editor’s note:

Welcome to Edition #48 of The Daily Prediction!

The tech world is buzzing as xAI releases their AI video and companion tools, “Imagine” and “Valentine”, for Grok Heavy subscribers. This move could revolutionize creative workflows and personalized AI experiences.

Meanwhile, the tariff games are still ongoing. President Trump is doubling down on his tariff strategy, raising questions about its legality and potential long-term impacts on global trade.

Prediction markets are speculating about these tech and trade topics. We’re here to help you spot the signal in the noise, and maybe profit from the chaos. 💰

— The Daily Prediction Team

🧑‍💻 xAI Introduces New Text-to-Video Tool

On August 1, xAI officially announced two major new tools, exclusively for Grok Heavy/SuperGrok users:

Imagine: a text-to-video-with-sound system powered by Grok’s Aurora engine
Valentine: personality-based AI companion

The market’s intrigue around xAI is increasing, but is this enough for them to climb to the top rung of the ladder? 🤔

Interestingly, prediction markets are not bothered. Not at all. For instance, Polymarket traders are still looking at Google as the one with the best AI model this year.

Here’s how this Polymarket prediction is playing out:

Google: 47%
OpenAI: 32%
xAI: 16%
Meta: 5%
Anthropic: 2%

On Kalshi, you can also predict the best AI this August, although xAI’s Grok is nowhere to be seen as well. Google’s Gemini (49%) and OpenAI’s ChatGPT (46%) are almost tied at the top. Other products have less than 1% probability.

🏁 Who’s Leading?

Despite xAI’s recent efforts, Google’s Gemini 2.5 Pro continues to set the bar in multimodal reasoning. Released in March, Gemini leads its competition in enterprise adoption.

Here’s the LMArena AI leaderboard on both the Text and WebDev sectors.

The competition is ramping up its efforts, too. According to SemiAnalysis, tech giants like Microsoft, Amazon, Google, Meta, and xAI are investing billions to secure a computational advantage.

xAI, in particular, is noted for its high cash burn rate, with over $1B monthly. It is building its own data centers and leveraging real-time data from X for model training.

Are there any dark-horse runners in this space, though?

Other players like Mistral, DeepSeek, and Anthropic are building low-cost, domain-effective alternatives. However, they currently lack the market presence of Google, OpenAI, and xAI.

So, can xAI challenge its top two competitors? Knowing Elon Musk, he’ll try. 🤷‍♂️

👱 Trump Doubles Down on “America First” Tariff Strategy

President Trump doubled down on his trade deal strategy, defending sweeping tariffs ranging from 10-41% on imports from over 60 countries. The administration cited trade deficits, fentanyl smuggling, and diplomatic disagreements as justification.

As such, prediction markets are about to close predictions on which countries Trump will tariff this year.

On Polymarket, Mexico is the only remaining unresolved country in their predictions.

However, this market is already under review. Trump has already extended Mexico’s current 25% tariff rate for 90 more days. Expect this to resolve into “Yes” sooner or later.

On Kalshi, three other countries are still left unresolved. Take a look:

🤔 How Will This Affect the Global Economy?

Canada and Mexico, with trade comprising 70% of their GDP, face severe impacts from 25% tariffs. This was later escalated to 35% for Canada, for which Canadian Prime Minister Mark Carney was “disappointed”.

Bloomberg Economics estimates Mexico’s GDP could decline by up to 16% due to its export reliance on the US.

Meanwhile, the European Union, facing a 15% tariff, is expected to see a manageable GDP drop of 0.3-0.5%.

Brazil’s 50% tariff could reduce GDP by 0.6-1%, per J.P. Morgan.

The most direct effects are felt by countries hit with the steepest tariffs. Syria (41%), Laos (40%), and Myanmar (40%) are tied to perceived geopolitical risks and links to sanctioned economies. Switzerland (39%) is bracing for a significant impact on the luxury watch, pharmaceutical, and financial services sectors.

As for the United States, analysts warn that prolonged reliance on tariffs undermines the dollar’s reserve status and corporate investment climate.

Can the broader global economy absorb some of the initial shock? We’ll see. But the Trump administration surely lost some friends recently. 😤