In an X post, the billionaire investor wrote that the project named Terafab “launches in 7 days,” signaling the beginning of a massive undertaking that could cost billions of dollars but could ease supply constraints for the company and help it face potential geopolitical risks.

In January, Musk suggested that Tesla’s (TSLA) existing chip suppliers, Samsung Electronics (SSNLF), Micron Technology (MU), and Taiwan Semiconductor Manufacturing (TSM), cannot supply the EV maker at the levels it needs.

“In order to remove the probable constraint in three or four years, we are going to have to build a Tesla TeraFab.” Musk said during the company’s earnings call, adding, “A very big fab that includes logic, memory, and packaging, domestically.”

“That’s going to be very important to ensure we are protected against geopolitical risks,” he said. “I think people maybe are underweighting some of the geopolitical risks that are going to be a major factor in a few years.”

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“xAI was not built right first time around, so is being rebuilt from the foundations up,” Musk wrote in a post on X. “The same thing happened with Tesla.” Musk followed that up with a post on Friday morning and apologized for the fact that “many talented people over the past few years were declined an offer or even an interview” with the generative artificial intelligence company. He added that he and another xAI executive, Baris Akis, are going through the company’s interview history and “reaching back out to promising candidates.”

Musk’s comments came hours after he said he expects Digital Optimus, a joint artificial intelligence project between Tesla (TSLA) and xAI, to be ready for users to experience in six months.

Dai’s departure, which was reported earlier this week, comes on the heels of the exits of other co-founders of the Grok AI chatbot maker, including Toby Pohlen, Jimmy Ba, Tony Wu, and Greg Yang.

After Dai and Zhang’s exits, only two of the 11 people who started the company with Musk in 2023 — Manuel Kroiss and Ross Nordeen — remain with xAI. Last month, SpaceX (SPACE) announced it was acquiring xAI in a deal that valued the combined company at $1.25T.

In January, xAI closed a Series E funding round for $20B. The maker of the Grok chatbot did not disclose the valuation at the time, but previous reporting had indicated that the next funding round could value xAI at $230B.

Earlier this week, Tesla received clearance from the U.S. government to convert its investment in xAI into a stake in SpaceX. Tesla had previously invested $2B into xAI.

The post Musk apologizes for not building xAI ‘right’ initially, says it’s being rebuilt appeared first on Up2info.com.

The partnership on the project is part of the agreement regarding Tesla’s planned $2B investment in xAI earlier this year.

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

“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),” he added. “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.”

Grok is xAI’s large language model.

“In principle, it is capable of emulating the function of entire companies,” Musk said. “That is why the program is called MACROHARD, a funny reference to Microsoft. No other company can yet do this.”

Musk initially revealed the Macrohard project in August 2025.

xAI recently merged with Musk’s SpaceX (SPACE), giving the combined company a valuation of $1.25T.

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On the bearish side, Marc Gerstein issued a Strong Sell rating for AppLovin (APP), citing concerns that its intrusive advertising approach will alienate users over time. Deep Value Investing also lowered Tesla (TSLA) to a hold, noting that the market is becoming less forgiving of narrative-driven stocks.

Upgrades

• Snowflake (SNOW): Upgrade to Buy by The Asian Investor. The analyst views the recent SaaS sector sell-off as an overreaction, highlighting Snowflake’s robust free cash flow of $765M in Q4 and strong momentum in Cortex AI production adoption as key reasons for the contrarian opportunity.

“Snowflake (SNOW) has recently been subjected to serious selling pressure as SaaS fears gripped the market and investors sold shares of software companies they deemed were at risk of AI-driven disruption. … The SaaS platform has seen a significant multiplier compression.”

• Green Thumb Industries (GTBIF): Upgrade to Buy by Joseph Parrish. Despite broader cannabis industry distress, the analyst highlights the company’s strong balance sheet with manageable $245M debt and resilient free cash flow of $214M as positioning it to consolidate as weaker peers falter.

“With about $6 billion in debt maturing this year across the industry, operators with weak or negative operating cash flows will find themselves in a pinch. It’s a chance for stable players like Green Thumb to pick up assets, grow market share, and ultimately move forward in a better position, with better margins.”

Downgrades

• AppLovin (APP): Downgrade to Strong Sell by Marc Gerstein. While the company is currently performing well operationally and financially, the analyst warns that its intrusive advertising strategy that locks players into screens until long ads finish risks alienating users and causing long-term business decay.

“Early entrants can and do succeed with such ads, but as time passes and consumers defect, I expect APP’s fortunes to sour—unless it changes its ways. … But for now, I’m at ‘Strong Sell…I simply do not want to own APP at all, unless or until I see some indication of a dramatic change in the company’s advertising philosophy.’”

• Tesla (TSLA): Downgrade to Hold by Deep Value Investing. The analyst cites repeated misses on robotaxi and FSD timelines, with Waymo remaining far ahead in fleet size and market coverage, suggesting that the stock’s narrative-heavy setup is becoming increasingly fragile as macro conditions no longer support risk-taking.

“In my view, trading Tesla, Inc. (TSLA), starts with one basic rule: this is not a stock you analyze like a normal car company. … That said, as long as there are catalysts ahead, namely the start of Cybercab production in April and the Optimus Gen3 unveil in Q1 2026, the story can help shield the stock from deeper drawdowns.”

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Instead, CEO Elon Musk has shifted focus to developing Tesla’s (TSLA) Digital Optimus, an AI agent for the electric vehicle company, the report said. This would be a digital version of the humanoid robot Optimus that Tesla has been developing since 2021. It is expected to eventually perform “autonomous software interaction, code generation, and real-time decision-making.” Musk wants it to go beyond analyzing screenshots and instead process a continuous stream of information and responses.

Musk initially revealed the Macrohard project in August 2025.

“It’s a tongue-in-cheek name, but the project is very real!” Musk said in a post on X at the time. “In principle, given that software companies like Microsoft do not themselves manufacture any physical hardware, it should be possible to simulate them entirely with AI.”

On xAI’s website, there were zero job openings for its Macrohard department as of Wednesday morning. More than 20 xAI engineers working on Macrohard have either left the company or shifted to different departments over the past few months.

xAI recently merged with Musk’s SpaceX (SPACE). Tesla announced in late January it plans to invest $2B into xAI.

“But if there are things which xAI can help accelerate our progress, then why should we not do that? And that is the reason why we’ve gone ahead with such an investment because this is part of the strategic initiative,” said Tesla CFO Vaibhav Taneja.

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Deliveries of Tesla Model 3 and Model Y built at the company’s Tesla Shanghai Gigafactory, including exports to markets such as Europe, totaled 58,600 vehicles in February. That marked a 91% increase from a year earlier, following a 9.3% rise in January, according to Tesla China.

However, sales were down 15.2% from January.

Tesla’s (TSLA) China-made EV deliveries in February 2025 were affected by a partial assembly-line shutdown at the Shanghai plant for the refreshed Model Y during the Lunar New Year holiday period.

Among local rivals, BYD (BYDDF) (BYDDY) reported February sales of 190,190 vehicles, down 41% year over year. XPeng (XPEV) deliveries declined 49.9%, while Geely Automobile (GELYF) (GELHY) posted a 1% increase to 206,160 vehicles.

Meanwhile, NIO (NIO) delivered 20,797 vehicles in February, marking a 57.6% increase from a year earlier.

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The facility will feature 41 gas-burning turbines. It will be located in Southhaven, which is also where xAI is developing a data center dubbed MACROHARDRR. xAI has two data centers, Colossus 1 and 2, located in nearby Memphis, Tenn.

Early last month, it was revealed xAI had merged with SpaceX (SPACE), bringing two of Elon Musk’s most valuable companies under one roof. The combined companies are expected to have a valuation of $1.25T. Musk also serves as the CEO of Tesla (TSLA).

Residents, along with representatives from the NAACP and an environmental group, were apparently upset the MDEQ decided to hold the board meeting on the same day as the state’s primary elections, the report said.

“We are outraged that, despite the community’s clear demand to move the Election Day hearing, MDEQ chose to bulldoze through a decision that silenced the very residents most harmed by it,” said Abre’ Conner, director of environmental and climate justice at NAACP, in a statement.

“Mississippi state regulators appear to be more interested in fast-tracking xAI’s personal power plant than conducting a thorough review of its impacts and having meaningful engagement with the families that will be forced to live with this dirty facility—and its pollution—in their communities,” said Patrick Anderson, a senior attorney at the Southern Environmental Law Center.

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Rivian (RIVN) will debut the R2 on Thursday at SXSW in Austin, Texas, with pricing expected to place the vehicle competitively with Tesla’s (TSLA) Model Y, the Hyundai (HYMTF) Ioniq5, and the Ford (F) Mustang Mach-E.

“Our newly introduced Rivian R2 model suggests full scale US demand in the 212K to 335K range, supporting an above-consensus 2027 outcome,” TD Cowen analyst Itay Michaeli said in a note to clients, with his expectations exceeding consensus estimates for the vehicle.

Accordingly, Michaeli believes this will narrow the company’s anticipated 2027 EBITDA loss and lead to a higher terminal multiple of 17x versus 14.5x. With shares down more than 10% so far this year, Michaeli believes the stock now presents a favorable risk/reward.

Michaeli raised his price target for Rivian by 18% to $20, suggesting a 26% upside from Monday’s close.

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For the week, Nasdaq (COMP:IND) was mostly flat, while Dow (DJI) lost 1.9%, respectively.

Wall Street had a slew of upgrades and downgrades from analysts. Here are some of the major calls for the week:

MongoDB in focus after Q4 results

Baird downgraded MongoDB (MDB) to Neutral from Outperform and reduced its price target by nearly 50%, to $260 from $500, following the company’s fourth-quarter results.

“While growth would have been 30% normalized for a bundling impact, it still missed investor expectations (investors were looking for the fourth consecutive quarter of acceleration). The weaker-than-expected FQ4 beat also affects the starting point for FQ1 and F2027,” said Baird analysts William Power and Yanni Samoilis.

Barclays reduced its price target to $370 from $440 on the stock, while Needham slashed its price target by 40% to $300 from $500. Citi, Wedbush, and Wolfe Research also lowered PT.

Citi, which maintained its Buy rating, said “the market reaction was overdone.” Wedbush analyst Dan Ives also maintained Outperform rating.

“While this was a major hiccup, we remain positive on the name as new and existing customers leverage its platform to modernize legacy applications while driving margin expansion and cash flow generation,” Ives said.

Tesla gets a bull rating from BofA

Bank of America picked up coverage on Tesla (TSLA) reinstating the stock with a Buy rating. The firm called the EV maker the current leader in consumer autonomy.

BofA set a price objective of $460 on the stock.

“We expect TSLA to quickly become a leader in robotaxi services, given its ability to scale more profitably than competitors. We see autonomous vehicles spurring the next era of mobility and, as the most significant change agent in the Auto 2.0 landscape, offering consumers the prospect of saving time, safer travel, and more accessible transportation,” said analyst Alexander Perry.

Marvell upgraded after Q4 results

BofA upgraded Marvell Technology (MRVL) to Buy from Neutral after it posted fourth-quarter results and outlook that beat estimates.

“MRVL’s earnings call gives us greater confidence in: 1) company’s solid leverage to AI optical connectivity, 2) potential for success in upcoming Microsoft (MSFT) custom chip (XPU) program, and 3) turning the corner on Amazon (AMZN) XPU transition year,” said analysts led by Vivek Arya. BofA raised the price target on the stock to $110 from $90.

J.P. Morgan also raised PT to $135 from $130, while Evercore hiked it to $155 from $133.

Southern upgraded at KeyBanc

KeyBanc upgraded Southern Co. (SO) to Sector Weight from Underweight, saying the shares have largely lost their historical premium after underperforming utility peers over the past 12 months.

KeyBanc’s Sophie Karp believes the stock is fairly valued, and recent earnings growth outlook revision and constructive news flow should further support the shares.

The company recently raised its long-term earnings per share compound annual growth rate to as high as 8% through 2030. KeyBanc said the new growth targets bring the company more in line with its higher-growing, large-cap, vertically integrated peers.

Wedbush lowered rating on The Trade Desk (TTD) to Underperform from Neutral, citing an overestimation of the positive impact from the rumored OpenAI (OPENAI) deal.

Wedbush believes the rumored partnership would provide TTD access to highly valuable intent data that the company could leverage across its customer base in connected TV and retail. However, the share price action overestimates near-term accretion while ignoring the inevitable DSP dilution and disintermediation risks inherent in partnering with a platform like OpenAI while introducing new execution risks and margin uncertainty.

Ciena (CIEN) was upgraded by Bank of America from Neutral to Buy, and the PO was raised to $355 from $260 the company released quarterly results and guidance.

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AGI is roughly defined as a hypothetical kind of AI that can understand, learn, and perform essentially any intellectual task a human can, at roughly human level or beyond. That advanced humanoid robot concept would appear to be a generation or two beyond what Tesla (TSLA) is anticipated to reveal with Optimus Gen 3, which is anticipated to be a humanoid robot designed to perform industrial and household tasks using Tesla’s (TSLA) full self-driving–style AI stack.

Earlier this year, Tesla said it plans to announce Optimus Gen 3 in the first quarter of 2026, describing it as the first version designed for mass manufacturing rather than demo.

Morgan Stanley expects that Optimus Gen 3 will largely be contained to Tesla (TSLA) factories this year, where it can collect critical real-world data to train its models and trial novel hardware designs in a controlled, lower-risk environment. “Given that it would be over two years since the last major, full-body Optimus update and the numerous pivots the company has made… we would not be surprised if Gen 3 is a substantial departure from the current version,” updated analyst Adam Jonas. He thinks Optimus Gen 3 could actually be simpler than expected.

Elon Musk has suggested that Optimus Gen 3 could scale rather quickly to roughly 1M units per year.

Shares of Tesla (TSLA) were down 0.8% in premarket trading on Thursday to $402.80.

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