XAI's Macrohard project stalls as Tesla ramps up a similar AI agent effort

• XAI's Macrohard project has stalled amid leadership changes and a data project pause.
• Tesla is working on a 'Digital Optimus' project that involves developing an AI agent.
• Elon Musk first announced Macrohard in August.

Macrohard, XAI's ambitious AI agent project, has stalled following leadership shake-ups and suspension of a data project involving 600 contractors, people familiar with the situation told Business Insider.

At the same time, Musk's other company, Tesla, has been ramping up its own AI agent project called "Digital Optimus," according to workers.

CEO Elon Musk announced Macrohard — a tongue-in-cheek reference to "Microsoft" — in August. Since "software companies like Microsoft do not themselves manufacture any physical hardware, it should be possible to simulate them entirely with AI," he said on X at the time. The effort has aimed to build an AI white-collar worker.

Macrohard has been considered one of xAI's core projects, alongside Grok Code and Grok Imagine.

Since its launch, Macrohard has shuffled between a number of leaders and faced difficulty scaling up, according to company insiders.

Two Macrohard leaders left the company in February, people with knowledge of the departures said.

During an all-hands meeting shortly thereafter, Musk announced that xAI cofounder Toby Pohlen would oversee the project. Pohlen announced his exit 16 days later.

He had faced pressure from Musk regarding the project's development, although Musk also expressed displeasure with the team's progress in the months before he took over.

Pohlen declined to comment.

Musk and representatives for xAI and Tesla did not respond to requests for comment.

Nearly two dozen xAI engineers identified themselves as working on Macrohard via X or LinkedIn. Most have left the company or shifted to a different team in recent months, including more than a dozen departures in the past month alone.

It's unclear how many people remain assigned to the project.

Enter Tesla

In recent weeks, some employees were told some Macrohard work would shift to Tesla's Autopilot team, along with some of Macrohard's computing capacity, insiders said.

Tesla has also been working on an AI agent known internally as "Digital Optimus," a nod to the humanoid robot Tesla has been building since 2021. The digital version is meant to act as an AI agent that can perform tasks on a computer.

In February, Tesla posted a role for an AI engineer to work on a computer use agent — a similar type of agent that xAI's Macrohard has focused on — that can perform tasks like "autonomous software interaction, code generation, and real-time decision-making."

Instead of relying primarily on models that analyze screenshots, which is a common approach for computer-use agents, the team is focusing on real-time control methods. In other words, the AI processes a continuous stream of information and responds, rather than analyzing a frozen image and acting step by step.

The approach is similar to how its Full Self-Driving system processes live video. Musk has repeatedly told xAI employees that the project should emulate Tesla's work with Full Self-Driving, which uses video data to help the AI learn to navigate its environment in real time.

Tesla has also used similar techniques in developing its humanoid robot.

It marks a different strategy from xAI's Macrohard project, which was trained primarily on static images rather than continuous video.

XAI does not currently have any job openings listed for the Macrohard team, according to a review of the company's careers page.

A pause on data collection

A data annotation project for Macrohard that involved more than 600 AI tutors was paused last month, according to a memo viewed by Business Insider. xAI employs around a thousand contract workers who help hone Grok and teach it to do everything from maintain a conversational tone to generate realistic images.

The workers on the Macrohard project were told to screen record their work and leisure activities in order to train the AI how to emulate their actions and act as a digital agent.

A project lead told workers in early February that researchers had "discovered many flaws within the model, and would like to make some changes to our model and the way we collect data," the memo said. Workers were told at the time that data collection would resume in two to four weeks.

As of this week, the project is still on pause.

Separately, xAI had tutors working to hone the agent's ability to act as an AI sales assistant for SpaceX's website and a separate project that trained the system on how to use spreadsheets, people with knowledge of the teams said.

Tesla and xAI have collaborated in the past, including on integrating Grok into vehicles.

In January, Tesla announced it had agreed to invest $2 billion in xAI to begin "evaluating potential AI collaborations between the companies."

In a January podcast appearance, Sulaiman Ghori, an xAI engineer who worked on Macrohard and has since left the company, compared xAI's work to a digital version of Optimus.

Just as the humanoid robot performs physical human actions, he said, the AI agent would be able to perform human actions in a digital environment.

Ghori also mentioned using unused Teslas to power the system in the future as they continued to scale Macrohard.

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