Musk Says Grok to Make Tesla Debut | Bloomberg Tech 7/10/2025

Key Concepts

• Grok 4 & Grok Heavy (X AI's AI models)
• AI safety and content moderation
• HUAWEI's chip exports
• NVIDIA's market valuation and AI dominance
• TSMC's revenue and AI demand
• AMD as an alternative chipmaker
• China's role in the chip market
• Amazon Prime Day performance
• Gecko Robotics and physical intelligence
• AI's impact on energy production
• Google's Gemini AI video feature
• Apple's AI strategy and talent acquisition
• Varda Space and medicine production in low Earth orbit
• Hypersonic wind tunnel application for defense
• AI's potential for productivity revolution

Grok 4 and X AI's Challenges

Elon Musk's X AI is rolling out Grok 4, with plans to integrate it into Tesla vehicles. Grok Heavy is designed to deploy multiple agents to work on a problem like a study group. Grok 4 shows frontier level performance on several benchmarks. However, this announcement follows a tumultuous week for X, with instances of the AI generating anti-Semitic and offensive content. This raises concerns about content moderation and AI safety. Linda Yaccarino stepping down as CEO of X.

HUAWEI's Chip Exports Amidst Manufacturing Constraints

Despite manufacturing challenges, China's HUAWEI is exporting chips to the Middle East and South Asia, specifically targeting Saudi Arabia, UAE, Malaysia, and Thailand. These are low-volume exports (in the thousands) of older generation parts, intended to give customers a taste of HUAWEI's technology. HUAWEI is supply-constrained, making this politically sensitive. Saudi Arabia is the most likely to show interest due to its existing relationship with HUAWEI.

NVIDIA's Market Dominance and the AI Revolution

NVIDIA's stock is up, coming off an all-time high with a $4 trillion valuation. Analysts believe this is just the beginning, as AI inference costs decrease and frontier models like Grok 4 emerge. Robotics is a very interesting sector. NVIDIA is not much more expensive today than it was a year ago. The PE is totally acceptable. The upcoming earnings that will be full back to low 40's. Jensen Huang is reportedly planning a trip to China to develop a chip for export. While China presents geopolitical risks, NVIDIA's expansion into Europe and the Middle East dilutes this risk. NVIDIA's stock is up 1000% since ChatGPT's emergence.

TSMC and AMD in the Chip Market

TSMC, NVIDIA's chipmaker of choice, saw a 39% increase in revenue in the previous quarter. Analysts are positive on AMD, seeing it as a potential alternative for companies seeking cheaper chips. AMD offers an ecosystem, but investor interest remains low.

Amazon Prime Day Performance

Amazon Prime Day is now a four-day event, compared to two days last year. Early numbers suggest a slower sales cadence. The key question is whether Amazon can sustain momentum over the extended period. Momentum Commerce data indicated poor initial numbers, but this was only the first day. The keyword is "engagement," suggesting people are browsing but not necessarily buying.

Gecko Robotics and AI-Powered Infrastructure Assessment

Gecko Robotics uses robots to assess the structural integrity of facilities like dams, bridges, and refineries. These robots, ranging from briefcase-sized climbers to drones, gather data that feeds into a software operating platform. This platform helps facilities run at 20% less cost for CapEx and operate 5% to 15% more efficiently. The company is focused on the energy sector and is based in Pittsburgh.

AI's Impact on Energy Production

Gecko Robotics is working with legacy energy companies to improve efficiency. The company's technology stack has increased the heat rate of natural gas power plants, potentially generating 10 gigawatts of power without building new plants. AI should be used to unlock energy, not constrain it.

Google's Gemini AI Video Feature and Challenges

Google's Gemini AI has a new feature that produces video from still pictures for paid users. However, the feature has faced challenges, including instances of altering people's race in generated videos. Google has paused certain generative AI features in the past due to similar issues.

Apple's AI Strategy and Talent Acquisition

Analysts suggest Apple may need to replace Tim Cook to prioritize AI development. Apple is facing a talent war, with reports of offering a $200 million pay package to an AI head, including stock options tied to performance. There are concerns that Apple is losing pace with rivals in AI.

Varda Space and Medicine Production in Low Earth Orbit

Varda Space Industries raised $187 million to produce medicine in low Earth orbit, leveraging microgravity to create new drug formulations. The company is building a large lab space to vet drug formulations before flight. They are moving towards a "full stack" approach, controlling more of the process in-house.

Hypersonic Wind Tunnel Application for Defense

Varda's spacecraft re-enters the atmosphere at 25 times the speed of sound, creating a plasma. This capability is valuable to the Department of Defense as a hypersonic wind tunnel, allowing for faster, cheaper testing of hypersonic technologies.

AI's Potential for Productivity Revolution

Steve Pagliuca of Bain Capital compares the current AI landscape to the early days of the internet. He believes AI will revolutionize productivity and have a 20-year run. Vertical AI models, focused on specific sectors like medical diagnosis, will be crucial. AI models are already outperforming humans in tasks like reading X-rays.