Telegram’s $300M xAI Deal in Question After Elon Musk Denies Signed Agreement

Key Takeaways

• Pavel Durov said Telegram had reached a deal to distribute xAI’s Grok to users.
• He claimed xAI would pay Telegram $300 million in cash and equity plus 50% of subscription revenue.
• However, Elon Musk insisted that nothing has been signed yet.

On Wednesday, May 28, Telegram CEO Pavel Durov and Elon Musk engaged in a bizarre back-and-forth on X that suggested some kind of tension or misunderstanding between the tech billionaires.

After Durov declared that xAI’s Grok would be distributed on Telegram in a deal worth upward of $300 million, Musk rebutted his statement, casting doubt on the agreement.

Telegram Grok Deal

According to Durov, Musk agreed to a one-year partnership to distribute Grok to Telegram users, “and integrate it across all Telegram apps.”

He said xAI would pay $300M in cash and equity for the arrangement, as well as 50% of the revenue from Grok subscriptions sold via Telegram.

The same day it was reported that Telegram would raise $1.5 billion in a new bond offering, Durov added that the deal would “strengthen Telegram’s financial position.” However, Musk’s reply cast doubt on the agreement.

Musk’s Rebuttal

In a blunt and somewhat standoffish comment on Durov’s X post, Musk replied that “no deal has been signed.”

Durov didn’t elaborate on why he had publicized details about the deal before anything had been inked. However, he insisted it was “agreed in principle,” and that “formalities are pending.”

Although it isn’t uncommon for companies to leak the details of commercial arrangements before they are finalized, Durov’s highly public disclosure represents a significant business faux pas.

Meanwhile, Musk’s chilly response doesn’t reflect well on the deal’s prospects going forward.

Messaging App AI Integrations

Any agreement to embed Grok into Telegram would give the platform a boost in the race for users as other messaging apps steam ahead with their own AI integrations.

Initially launched in North America in 2023, Meta rolled out its in-app AI assistant for European users in March.

Likewise, Apple has launched features like AI summaries and Smart Replies in iMessage.

Elsewhere, WeChat, TikTok and X have also integrated a growing range of AI functionalities into their respective messaging services.