xAI's bet on AI-generated AAA games

PLUS: Meta poaches a top AI founder and OpenAI releases Sora 2 API

Author

Jelani Abdus-Salaam
October 13, 2025

In partnership with

Welcome back, AI’ers!

Here’s What’s On The Menu For Today

  •  xAI's bet on AI-generated AAA games

  • Meta poaches a top AI founder

  • A tiny model outperforms giant LLMs

  • OpenAI releases Sora 2 API

AI ON MY MIND

Happy Monday,

Elon Musk’s xAI is making a bold move into the gaming industry, reportedly building world models to generate interactive, AAA-quality games. The company is aiming to release a playable, AI-created title before the end of 2026.

This project positions xAI to compete in the growing field of world model development. But can the technology move beyond just generating environments to also create the complex game logic and intuitive controls that define a great playing experience?

By the way, I've been getting questions about how AI works in practice, so I'm launching a separate newsletter that dives deeper into real business applications and practical advice. [Click here if you're interested].

-Jelani Fuel (Co-founder of Best of AI)

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TODAY’S TOP STORIES

xAI Bets on AI-Generated Games

The Recap: Elon Musk’s xAI is reportedly building world models to generate interactive 3D gaming worlds. The ambitious project aims to release a playable, AI-created AAA-quality game before 2026.

Unpacked:

  • The company hired Nvidia researchers Zeeshan Patel and Ethan He to lead the development of AI that can understand physics and object interactions.

  • xAI is also recruiting for an “omni team” and posted a ‘video games tutor’ opening to train its Grok model on game design principles.

  • Elon Musk publicly stated that xAI will release a “great AI-generated game before the end of next year,” with the goal of it being a AAA quality title.

Bottom line: This move positions xAI to compete in the growing field of world model development, a key focus for top AI labs. Success hinges on moving beyond generating environments to creating intuitive game logic and control, a challenge that remains a major hurdle for current AI.

Meta Poaches Top AI Founder

The Recap: Meta continues its aggressive AI talent acquisition, hiring Andrew Tulloch, co-founder of the $12B startup Thinking Machines Lab. This high-profile move signals Mark Zuckerberg's relentless push to assemble a leading AI research team.

Unpacked:

  • Tulloch, a respected machine learning expert, rejoins Meta after co-founding Thinking Machines with former OpenAI CTO Mira Murati and previously working at OpenAI.

  • The move follows reports of a previously rejected compensation package, highlighting Meta's strategy of spending billions to secure top-tier researchers for its AI labs.

  • He will join Meta's new TBD Labs unit as the company pours up to $72B into infrastructure this year, consolidating its research efforts to build superintelligence.

Bottom line: This acquisition demonstrates that the battle for elite AI talent is a primary front in the race for AI supremacy. By poaching a key founder from a major competitor, Meta not only strengthens its own capabilities but also deals a strategic blow to a well-funded rival.

MY FAVORITE AI TOOLS

Relevance is my favorite AI tool right now (even more so than N8N).

Here’s why:

It’s an AI agent building tool that doesn’t require you to build out the logic using nodes. Instead, you use natural language to build out these agents. But the best thing imo is that you can build AI Agent teams.

Like agents talking to each other completing a goal until its done. It’s nuts. No other tool on the market is doing this. You have to check it out.

(Try it out →Link)

👾 AI Tools We Use Everyday

➡️ N8N for AI Agents - Literally use this everyday to write this newsletter (link)

➡️ Axiom AI - AI Browser automation to scrape anything on the web (link)

➡️ GummySearch - AI Reddit research (link)

Tools are sourced from our database and are not sponsored or affiliated.

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MORE NEWS

The 7M-Parameter Underdog

The Recap: A tiny new model named TRM is making waves by outperforming massive LLMs on a key AGI benchmark. At just 7 million parameters, its impressive performance signals a major shift toward smaller, more efficient AI.

Unpacked:

  • TRM achieves its high score with just 7 million parameters, a tiny fraction of the size of its competitors.

  • The model scored an impressive 45% on the ARC-AGI benchmark, a test designed to measure general artificial intelligence capabilities.

  • It outperforms giants like Deepseek R1 and Gemini while using just 0.01% of the parameters, demonstrating a massive leap in model efficiency.

Bottom line: This development challenges the idea that only massive models can achieve powerful results. The focus on efficiency could lead to advanced AI running on everyday devices, not just in large data centers.

 OpenAI Unlocks Sora 2

The Recap:  OpenAI has officially released the API for Sora 2, giving developers broad access to its advanced text-to-video model for the first time. This move opens the door for integrating high-quality video generation into a wide range of applications.

Unpacked:

  •  Developers can now directly integrate Sora 2’s video generation capabilities into their own software, services, and creative workflows.

  • As a state-of-the-art model, Sora 2 enables the creation of highly realistic and imaginative video scenes from simple text prompts.

  • This release positions OpenAI to compete directly with other text-to-video platforms by empowering a new wave of applications in filmmaking, advertising, and prototyping.

Bottom line: The Sora 2 API puts professional-grade video creation tools into the hands of a much larger creative and technical community. Expect to see an explosion of new video-centric applications and content formats in the coming months.

OTHER NEWS YOU MAY LIKE

OpenAI expanded its Agent Builder capabilities, allowing connections to third-party servers for building powerful automations.

Zapier launched a new MCP Server that connects OpenAI's agents to its ecosystem of over 8,000 applications.

Google gained new automation capabilities, with users now able to create Google Forms directly through AI agents via Zapier's new integration.SPONSOR US

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AI ON SOCIAL

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THAT’S IT FOR TODAY

Until next time, stay safe.

-Best of AI Team

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