Elon Musk’s xAI Partners with Kalshi to Bring AI to Prediction Markets

xAI, the AI startup founded by Elon Musk, has announced a partnership with Kalshi, the CFTC regulated prediction market for event based contracts. This collaboration integrates xAI’s conversational AI model called Grok into Kalshi’s platform, enabling retail traders to leverage real-time AI analysis when betting on outcomes ranging from Federal Reserve decisions to Oscar winners and cryptocurrency price movements. The partnership, revealed on X, marks a significant step in merging advanced AI capabilities with the fast-growing world of prediction markets.

Kalshi users can now query Grok’s large-language model to access onchain data, historical odds, and breaking news headlines before placing trades. For xAI, the integration provides a dynamic environment to test Grok’s reasoning and probability prediction capabilities in real time. The partnership aligns with Kalshi’s mission to offer transparent, regulated trading opportunities, while xAI gains a practical application to refine its AI model, originally designed to compete with OpenAI’s ChatGPT and integrated into Musk’s social platform X.

A New Era for Prediction Markets

Kalshi, founded in 2018 by MIT alumni Tarek Mansour and Luana Lopes Lara, operates a federally regulated prediction market where traders purchase “yes” or “no” contracts on future events, with correct predictions settling at $1 per share and incorrect ones at zero. The New York-based platform supports cryptocurrency deposits in Bitcoin, Solana, USDC, and WLD, though all trades settle in U.S. dollars. According to a November 2024 report from the FIA Expo, Kalshi processed an impressive $1.4 billion in trades over just 11 days for election-related contracts, underscoring its growing influence in the financial sector. The platform’s recent $185 million Series B funding round in June 2025, led by crypto venture capital firm Paradigm, valued Kalshi at $2 billion, reflecting strong investor confidence in its model.

For xAI, this partnership comes on the heels of its own milestone, with a reported valuation of $80 billion following an all-stock acquisition of X, as noted by Axios. The collaboration positions two of America’s fastest-growing companies to reshape how retail traders approach prediction markets. By embedding Grok’s AI-driven insights, Kalshi aims to empower its users with data-driven decision-making tools, potentially setting a new standard for the industry.

Meanwhile, competition in the prediction market space is heating up. Rival platform Polymarket is planning a U.S. re-entry through its acquisition of derivatives exchange QCX, which also partnered with xAI and Grok in June 2025. This parallel move suggests that AI integration is becoming a key differentiator in the industry, as platforms seek to attract traders with advanced tools and real-time insights. For Kalshi, the partnership with xAI strengthens its position as a leader in the regulated prediction market space, offering retail traders a unique blend of accessibility and sophistication.

As prediction markets gain traction among retail investors, the collaboration between xAI and Kalshi could redefine how traders analyze and wager on future events. By combining Grok’s AI capabilities with Kalshi’s regulated platform, the partnership promises to deliver a seamless, data-driven trading experience. With both companies riding high on recent valuations and regulatory wins, their alliance signals a new chapter for prediction markets, one where artificial intelligence plays a central role in shaping investment decisions.