Musk denies it! xAI and Tesla, Inc. (TSLA.US) collaborating to advance the Macrohard project aimed at simulating all company functions with AI.

xAI and Tesla, Inc. (TSLA.US) CEO Musk confirmed that the Macrohard project is still progressing and will be the result of the two companies' joint efforts. This contradicts an earlier report by the media that stated xAI had suspended development of Macrohard - an artificial intelligence project aimed at allowing developers to simulate software creation work like that done by companies such as Microsoft Corporation (MSFT.US). The report claimed that Musk had shifted focus to developing Tesla, Inc.'s Digital Optimus - an AI entity. It will be a digital version of the Optimus humanoid Siasun Robot&Automation that Tesla, Inc. has been developing since 2021. It is expected to eventually perform "autonomous software interaction, code generation, and real-time decision-making." Musk hopes it will not only analyze screen shots but also process continuous streams of information and respond. However, Musk revealed in a post on X that after Tesla, Inc.'s recent investment in xAI, Macrohard and Digital Optimus are now essentially the same project and part of a joint project between the two companies. Musk said, "Grok is the Chief Commander/Navigator with deep world understanding capability, responsible for commanding Digital Optimus, which is responsible for handling and executing real-time computer screen videos and keyboard/mouse actions from the past 5 seconds," "Grok is like a more advanced, more precise steering software." He added, "You can think of Digital Optimus AI as System 1 (the instinctive part of the brain) and Grok as System 2 (the thinking part of the brain). This system running on the ultra-low-cost Tesla, Inc. AI4 ($650) will be highly competitive, coupled with the relatively economical use of expensive xAI NVIDIA Corporation hardware. It will be the only real-time intelligent AI system. This is significant." "In principle, it can emulate the functions of an entire company," Musk said. "That's why the program is called MACROHARD, as a humorous dig at Microsoft Corporation (Microsoft). No other company can currently do this." Musk initially revealed the Macrohard project in August 2025. "It's a playful name, but the project is very real!" Musk said in a post on X at the time. "In principle, since software companies like Microsoft Corporation do not themselves manufacture any physical hardware, it should be possible to fully simulate them with AI." As of Wednesday morning, there were no job postings for the Macrohard division on xAI's website. Over the past few months, more than 20 xAI engineers working on Macrohard have resigned or transferred to different departments. xAI recently merged with Musk's SpaceX. Tesla, Inc. announced at the end of January plans to invest $2 billion in xAI. Tesla, Inc. CFO Vaibhav Taneja said, "But if xAI has the potential to help accelerate our progress, why wouldn't we do that? That's why we make these investments, because it's part of our strategic plan."