Germany’s fast-rising AI startup Black Forest Labs has quietly ended its collaboration with Elon Musk’s xAI, marking the close of what was once a buzzworthy transatlantic partnership.
The Freiburg-based company, which made waves last year with its FLUX-1 image generation model, was once tapped to help power Grok—the chatbot developed by Musk’s AI venture. But that partnership has now come to an end, a source close to the company confirmed.
The split appears to be the result of xAI moving in a different direction. After experimenting with third-party tools like FLUX-1, the company has since developed its own image model, Aurora, which launched in December to enhance Grok’s multimodal abilities.
It’s unclear when the two companies stopped working together—or whether the decision was mutual. Neither xAI nor Black Forest Labs has issued a public statement.
The collaboration had not been without controversy. Shortly after the Grok integration, Black Forest Labs came under fire for lacking strong safeguards in FLUX-1. Some users were able to generate fabricated images of public figures, including manipulated content of Donald Trump, according to TechCrunch reports.
While the xAI chapter may have closed, Black Forest Labs continues to grow. It now provides image-generation infrastructure for Le Chat, the chatbot developed by French LLM startup Mistral, and also collaborates with Deutsche Telekom.
Founded by Robin Rombach, a lead developer behind Stable Diffusion at Stability AI, Black Forest Labs entered the spotlight in mid-2023 with claims that its text-to-image tools outperformed leading U.S. models. That momentum helped the company land $31 million in funding, led by Andreessen Horowitz, with Garry Tan, CEO of Y Combinator, also backing the round.
The partnership with xAI—and its abrupt end—has resurfaced a familiar challenge in the generative AI space: ensuring tools aren’t misused. Whether it’s Black Forest Labs, xAI, or any of the growing number of AI developers, questions around ethics, safety, and content control remain central to the debate.
For now, Black Forest Labs seems focused on strengthening its European footprint, even as it navigates the global spotlight it earned with its early breakthroughs.
