Background: xAI was founded by Elon Musk in 2023 to compete with OpenAI and Meta in the ongoing AI arms race. Elon Musk actually co-founded OpenAI before storming out in 2018 after disagreements with the leadership team.

What happened: Now, Musk’s xAI just unveiled a new (and very controversial) update to its Grok chatbot: sexually explicit AI companions named Ani and Valentine, designed to flirt with users of any gender.

What else: The move has caught the attention of regulators, with 44 US state attorneys general urging AI firms to protect minors from sexualised chatbots. Elon, on the other hand, claims these bots could help boost the global birth rate. But many experts believe that these sexualised chatbots really highlight the ethical grey zone of emotional AI.

What's the key learning?

💡Emotional AI refers to technology designed to recognise, stimulate and respond to human feelings. Companies like xAI are building systems that don’t just answer questions for you…they actually bond with you.

💡The logic behind emotional AI is simple. The more connected a user feels to its chatboy, the longer they engage...meaning the more data generated and the greater likelihood for customer retention.

💡However, an MIT study of nearly 1,000 people and 300,000 chatbot messages found that frequent users experienced higher loneliness, greater emotional dependence on AI, and lower real-world socialisation. So clearly, human emotions and algorithms don’t always mix well.