Short answer: August Kiles guesses Musk wants a full stack digital human rather than an API business. Jordan Metzner says if xAI's own developers want Claude or Codex to code, that alone could prompt a management change.
Watch this answer from Episode 31 (starts at 21:18) · Episode 31 notes and transcript
From Episode 31: How AI Is Replacing 100-Hour Due Diligence (Claude 4.6, Private Equity, and Emblem), starting at 21:18.
Sam Nadler [21:17]: The pace of development internally over the past, what, six weeks, eight weeks has just like really increased. But it's all because of a 4.6. Yeah. Let's transition just in the for time. So Musk, big reorg at xAI. Obviously, was the SpaceX merger announcement, I think it was last week. Any high level thoughts here?
August Kiles [21:41]: Yeah, I guess, the first thing that comes to mind here is it's always, he's always five steps ahead of everybody else in, everything he's doing. So my first thought is that there's definitely kind of a longer horizon thought process going on here. And I was actually just listening to a podcast yesterday that he was on, and you know, keeps, he talks about the digital Optimus, right, to go along with the physical Optimus robots that he's building. And so I do wonder if part of this is him saying, well, we're not as interested in being an API that, companies like Emblem rely on for, in his mind, like more basic workflows that are completely uninteresting when you're thinking about going to Mars. And he's more thinking, I actually want this company to build the kind of full stack like digital human that can do any sort of work that any human would do end to end. My guess is that's what this is about, and he's kind of hunkering down and doubling down on that. But I'm curious what you guys think.
Jordan Metzner [22:51]: That's an interesting take. I mean, let's not forget that xAI and now SpaceX have merged, which is separate from Tesla, which has the Optimus robot. So still separate companies, who knows where that'll go in the future. I think if you look back to Elon's tweet a few weeks ago, he referenced how good the Anthropic models are at coding, and I think he thought that they would have a better model for coding than they do today. And I think historically, when Elon not happy, like Elon pound table and like everybody has to go and change it up, you know. But I think it's more so, and I think this is kind of like an interesting thing that I was reading in the Matt Shumer blog post just about like one of the reasons why coding is the first solution of like these LLMs is because then code can write more code, to write more code, to write more applications. Right? So I think if that's the case, even internally at xAI, and they just like we mentioned earlier about Amazon, if they're developers if you're a developer at xAI, and you're demanding your boss that you wanna use Claude to code, which why would you not, considering it's the best Right. Know, Claude or Codex to code, and you're not saying, hey, give me xAI's coding tool. Well, think that, like, in and of itself is the sign.
Jordan Metzner [24:03]: Right? And, you mentioned earlier you guys use all the models. I mean, I can tell you honestly, like, we don't have Grok models in production. We use we definitely use, like, frontier models, like, Anthropic and OpenAI and Gemini, but we don't really use the Grok models in production. We haven't really found them of, like, high quality of use case yet. Maybe I'm wrong, maybe we're like not, we're missing the boat here, but I think the reality is like, if the internal developers at xAI are not demanding to use xAI, that that's enough to probably make a change in management. I know at Facebook, like, wanna use Claude too, I mean, I think it's it's happening all over the place.
August Kiles [24:35]: Right. Well, I think it's an interesting leveling of the playing field, right? Because Anthropic puts out the best model, and you know, if you're willing to kinda swallow your pride a little bit, if you're working at one of these other labs, then, you can then use that model internally to stay competitive on building the next one. So I'm I'm actually kind of, your point is interesting and it makes me curious as to what extent they're just allowing people to use Claude Code if they want to versus saying, no, you have to use, what we've got here. And also truthfully, we don't really use xAI that much either. It's mainly actually, there's certain features where we provide the user with a dropdown where they can select which one they want because sometimes people already have a preference, and that's where we have xAI in there, is just in case the user wants to use it, but all the stuff that we're doing on the backend, we don't use it.
Jordan Metzner [25:29]: Yeah. Yeah, totally agree. Okay, cool. Well, August, this was an awesome episode. Great to chat AI, great to chat Emblem, great to meet, and thanks for joining us today.
Sam Nadler [25:38]: Yeah. Episode 31, August, thank you so much. Don't forget to like and subscribe, and episodes are out every Friday. Thank you, everyone.
August Kiles [25:47]: Sweet. Thanks, guys. I this was great. I appreciate it.
Jordan Metzner [25:49]: Thanks, August. Thanks, everyone. See Bye you bye.
