xAI, the artificial intelligence firm founded by Elon Musk, is moving into the next frontier of machine learning, world models, in a bid to transform the global gaming market.
The California-based firm has hired two Nvidia researchers, Zeeshan Patel and Ethan He, to develop AI systems that can navigate and design physical environments, The Financial Times reports.
Nvidia, the pair’s former employer, has been a leader in simulation technology through its Omniverse platform.
People familiar with the matter say xAI plans to use world models for gaming, as these systems can generate interactive 3D environments and reason about objects in real time. But one source says the same approach could extend to robotics.
Earlier this month, Elon Musk said on X that xAI aims to roll out an AI-generated game before the end of 2026.
The company is staffing up for image and video generation on its “omni team,” which “creates magical AI experiences beyond text, enabling understanding and generation of content across various modalities, including image, video and audio.” Salaries for the roles range from $180,000 to $440,000, and xAI is advertising for a “video games tutor” to train Grok to produce video games for $45 to $100 an hour.
xAI also launched its latest image and video generation model last week, describing “massive upgrades” and saying it is free to use.
As of 2024, the gaming industry is estimated to be worth about $272.86 billion, powered by more than 3 billion gamers. The industry is out-earning other traditional forms of entertainment, such as films and music.
Analysts project its value could reach nearly $667.77 billion by 2030, fueled by mobile gaming and play-to-earn models that let players earn income from in-game activity. Streaming platforms like Twitch and YouTube Gaming have further expanded the ecosystem, paying top creators as much as $300,000 a month.
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