Elon Musk announces ‘Macrohard’ joint project between Tesla and his AI startup xAI

Elon Musk has announced a joint project between his electric vehicle company Tesla and his artificial intelligence (AI) startup xAI. Unveiled via a post on X, the project is called “Macrohard” — or alternatively, “Digital Optimus” – a tongue-in-cheek reference to Microsoft.

What is Macrohard

At its core, Macrohard is an agentic AI system which means it can take actions on a computer autonomously, rather than simply answering questions or generating text. The project will run on Tesla's in-house AI4 chip, paired with xAI's Nvidia-based server hardware.

The system works by pairing two components. The first is xAI’s Grok large language model, which acts as a high-level “navigator” — the thinking brain that decides what needs to be done.

The second is a Tesla-developed AI agent that handles the hands-on execution, processing real-time video of a computer screen and controlling keyboard and mouse inputs to carry out tasks.

Notably, xAI had already filed a trademark application for the "Macrohard" name with the US Patent and Trademark Office back in August 2025, as per a report by CNBC.

Read what Elon Musk has to say about Macrohard

Macrohard or Digital Optimus is a joint xAI-Tesla project, coming as part of Tesla’s investment agreement with xAI.

Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of real-time computer screen video and keyboard/mouse actions. Grok is like a much more advanced and sophisticated version of turn-by-turn navigation software. You can think of it as Digital Optimus AI being System 1 (instinctive part of the mind) and Grok being System 2. (thinking part of the mind). This will run very competitively on the super low cost Tesla AI4 ($650) paired with relatively frugal use of the much more expensive xAI Nvidia hardware. And it will be the only real-time smart AI system. This is a big deal. In principle, it is capable of emulating the function of entire companies. That is why the program is called MACROHARD, a funny reference to Microsoft. No other company can yet do this.

The announcement comes about two months after Tesla entered into an agreement to invest approximately $2 billion to acquire shares in xAI. Then, last month, SpaceX acquired xAI in an all-stock deal that valued the rocket company at $1 trillion and xAI at $250 billion.