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Elon Musk is now a driving force in prediction markets.
Musk’s xAI on Thursday announced a partnership to integrate its artificial intelligence chatbot Grok with Kalshi’s prediction markets service. In June, xAI announced a similar deal with Polymarket, a Kalshi rival.
Kalshi, the company that turned heads with a made-with-AI commercial during the NBA Finals this year, said Grok will be hosted on its platform and “provide helpful context on developments and fluctuations in market prices.”
In May, Grok made headlines when it provided unsolicited context to users on X about “white genocide” in South Africa. Earlier this month, Grok praised Adolf Hitler in comments about the Texas floods and spewed antisemitism.
“Kalshi’s feelings about the partnership are excitement only,” a spokesperson for the company said when asked if there were any concerns about Grok’s “horrific behavior.”
‘Wisdom of the crowd’
Predictions markets are gambling platforms that have real-time odds based on users willingness to bet on outcomes. They offer prop bets for real-world events.
Those who use prediction markets frequently reference the “wisdom of the crowd.” The Tesla CEO has said these services are “more accurate than polls, as actual money is on the line.”
Interactive Brokers and Robinhood also run prediction markets.
Kalshi CEO Tarek Mansour told the Motley Fool in April that these types of platforms are “the best way to forecast the future because of this skin in the game aspect. People don’t lie when their money is involved.”
In a video announcing the Kalshi-xAI deal, Grok was shown providing a “Market Summary” of the current odds for a wager on the question: “Will Elon Musk create a new political party this year?”
Polymarket and the Commodity Futures Trading Commission (CFTC), which regulates prediction markets, did not return a request for comment on xAI’s partnerships with the platforms or any potential conflicts of interest with Musk’s AI presenting information on Musk bets.
The variety of wager options on the sites is something to behold.
You can bet on whether there will be a major meteor strike in 2025 — currently a 16% chance, according to Polymarket — and a range of events from celebrity couple divorces to when Israel will strike Syria.
On Monday, a combined $7 million was bet on Kalshi and Polymarket for Astronomer CEO Andy Byron leaving the company after the viral Coldplay kiss cam video.
The 2024 election
Polymarket burst onto the scene during the 2024 election between President Donald Trump and then-President Joe Biden. The site continued to draw wagers as then-Vice President Kamala Harris entered the contest.
The platform flip-flopped favorites between Trump and Harris from August into October, before the odds swung firmly to Trump.
In October, four Polymarket accounts tied to one person wagered over $28 million on a Trump win.
Trading volume on the presidential race totaled nearly $3.7 billion.
“On Polymarket, it looked like a done deal, and if you were just watching TV, you would think it’s neck and neck,” Polymarket CEO Shayne Coplan said on CNBC’s “Squawk Box” after the election.
A poster showing betting odds for the 2024 U.S. Presidential Election displayed in NYC.
Adam Jeffery | CNBC
Polymarket has been barred from operating in the U.S. since 2022, when it paid the CFTC a $1.4 million penalty to settle charges, but it’s on the cusp of opening back up to U.S. users.
Earlier this month, the Justice Department and CFTC dropped investigations into the company, and Polymarket acquired derivatives exchange QCX.
“A lot of people want peace of mind, or they’re anxious and they want to know what’s going to happen, Coplan told CNBC’s “Squawk Box” on Wednesday. “That’s why they tune into the news. That’s why they tune into X. And now that there’s this other data point, which is the Polymarket.”
Coplan said Wednesday that Polymarket was “not profitable.”
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