Elon Musk's grand plans to turn Twitter into an "everything app" named X have evaporated as AI seizes the wandering attention of the world's richest man.

The big picture: X, once touted as a "global town square," has become a strip mine for AI training data instead.

• The transformation became unmistakable in March, when Musk turned X into a subsidiary of his xAI startup.
• Today X's chief economic value to Musk is its ability to feed mountains of human-generated text and live information into xAI's Grok — and then provide Grok with a ready base of users and testers.
• Grok, which debuted in 2023 as a jokier, more casual alternative to ChatGPT with fewer restraints on its behavior, has now been woven into every nook and cranny of X, where every post includes a Grok button.

Catch up quick: Yesterday's announcement that X CEO Linda Yaccarino was leaving the company ended any lingering illusions that X might rekindle ad sales growth.

• X, which is now a private company that doesn't have to share its financials, is estimated to be bringing in roughly half the revenue today that it had been when Musk bought Twitter.

The intrigue: As long as X was a separate company, its struggle for ad dollars would weigh on its ability to raise money and grow.

• Now X is just a line item on xAI's balance sheet, which is wildly inflated in AI's giddy market moment.

Yes, but: The AI industry has problems, too.

• On Monday, Musk announced he'd be unveiling the latest edition of his AI model, Grok 4, Wednesday evening (see below).
• But Grok, the AI bot designed by Musk as an anti-woke truth-teller, spent Tuesday spouting antisemitic ideas.
• After Grok started calling itself "MechaHitler," Musk's deputies at xAI pulled its plug and reset its instructions.

Flashback: One of Musk's big beefs with Twitter's previous leaders was that he said they let bots run rampant and drown out human voices.

• Now X's main character is a bot.

The bottom line: AI is replacing social media as the tech industry's dominant platform. That means X might not be the only social network to get swallowed up by AI.

Musk unveiled the newest edition of xAI's flagship AI model, Grok, late last night in a livestream video that touted Grok 4's prowess at topping benchmark scores.

Why it matters: xAI is in an accelerating race with OpenAI, Anthropic and other players to deliver faster, more reliable AI and fulfill the wild expectations investors now have for the technology.

Driving the news: Musk and several xAI researchers showed Grok 4 solving an advanced math problem, generating an image of two black holes colliding, and predicting the most likely winner of next year's World Series (the Dodgers at a 21.6% chance).

• xAI is claiming Grok as the new top-scoring model on Humanity's Last Exam, a collection of very advanced problems, as well as on other yardsticks of AI progress.

Between the lines: Grok 4 includes a new "heavy" version that deploys multiple agents to collaborate on solving particularly tough problems.

• Grok 4 is available to users immediately. The heavy mode is available at a $300 monthly rate.

The xAI researchers also demoed a new Grok 4 voice mode that's more responsive and natural than Grok's current one.

• But the voice model faltered when asked to whip up an "opera about Diet Coke," delivering what sounded more like a singsong Shakespeare monologue instead.

What they're saying: Musk repeatedly expressed amazement at the accelerating rate of Grok's advances — which seemed to be piling up even as he spoke.

• "Grok 4 is smarter than almost all graduate students in all disciplines simultaneously," Musk first declared.
• A few minutes later, he said, "Grok 4 is post-graduate, Ph.D. level in everything."
• A minute later, Grok had become "better than Ph.D. level."

What they're not saying: Musk and xAI's team asked Grok to solve a variety of problems in their hourlong demo — but "How do we prevent an AI from turning into a Nazi?" was not one of them.

• They didn't mention the chatbot's colossal meltdown once.

What's next: Musk and his team promised a new coding model in August, a multimodal agent in September and a video-generating model in October.

Nvidia's market cap entered uncharted territory yesterday, briefly surpassing $4 trillion about a year after first passing $3 trillion.

Why it matters: It's the first time any public company has ever hit that benchmark, reflecting the feverish investor interest in the AI chips giant.

Zoom in: Nvidia shares jumped above $164 in early trading yesterday, pushing the company's market cap — its share price multiplied by its total number of shares — through the $4 trillion threshold before receding to just below that figure.

Stunning stat: Consider that a year ago Nvidia had just passed the $3 trillion mark, joining Microsoft and Apple as the only companies in that rarefied air.

• A year before that, Nvidia's market cap had just topped $1 trillion.

The big picture: Nvidia has become a bellwether stock for the AI economy as tech companies invest heavily in product development and data center capability, powering Nvidia's rise.

• "This is a historical moment for Nvidia, the tech space flexing its muscles, and speaks to the AI Revolution hitting its next stage of growth led by the one chip fueling AI ... Nvidia," Wedbush Securities analyst and Nvidia bull Dan Ives wrote yesterday in a research note.
• He predicted that Microsoft — whose market cap was over $3.7 trillion yesterday — would soon follow.

Yes, but: Nvidia must navigate chip export restrictions imposed by the U.S. to curb China's ability to advance AI.

• Nvidia CEO Jensen Huang has called those restrictions a "failure," saying they've had the counterproductive effect of fostering innovation in China.

• Musk says Grok is coming to Teslas "next week at the latest." (X)
• OpenAI's long-rumored web browser will launch "in coming weeks" and aim to keep users inside the chat window, per sources. (Reuters)
• A departing Meta AI researcher circulated a memo internally that said the giant's generative AI effort has a "culture of fear." (The Information)

Ina is off for a well-deserved break — but of course she had to leave us with some Lego news. The company is announcing its latest Transformers model today — a 1,505-piece version of Decepticon Soundwave, including a special "sound brick." It will hit the market in August for $189.99.