Elon Musk on Wednesday unveiled Macrohard — also called Digital Optimus — a joint xAI-Tesla project designed to build an AI agent capable of running entire software companies autonomously.

Musk's announcement came hours after Business Insider reported that the project had been quietly stalling. Multiple Macrohard leaders left xAI in recent months, and a data annotation project involving 600 contractors was suspended. The public post appears to have been a direct response to the story.

How It Works

Macrohard pairs two systems: xAI's Grok acts as a high-level "navigator" (System 2 thinking), while a Tesla-built AI agent handles real-time screen video processing and keyboard/mouse actions (System 1). Musk compared the architecture to Daniel Kahneman's dual-process cognitive theory. The system runs on Tesla's AI4 chip paired with xAI's Nvidia-based cloud hardware.

"In principle, it is capable of emulating the function of entire companies," Musk wrote on X. "That is why the program is called MACROHARD, a funny reference to Microsoft."

Contradiction and Controversy

The announcement directly contradicts Musk's 2024 statements that Tesla had "no need to license anything from xAI." Tesla shareholders are currently suing Musk for alleged breach of fiduciary duty in connection with founding xAI. The joint project — part of Tesla's approximately $2 billion investment agreement with xAI — undermines Musk's earlier argument that no conflict of interest existed. xAI filed a trademark for "Macrohard" in August 2025.