In the ever-evolving landscape of technology and innovation, few rivalries capture the public’s imagination like that between Elon Musk and Bill Gates. These two titans of industry, both billionaires with world-changing ambitions, have clashed repeatedly over the years on topics ranging from climate change and philanthropy to artificial intelligence and corporate ethics. But in the lead-up to the founding of Macrohard—Musk’s audacious new AI-driven software company aimed squarely at disrupting Microsoft’s dominance—a pivotal exchange unfolded that underscored their differences and fueled Musk’s determination. Before officially launching Macrohard in August 2025, Musk extended an olive branch to Gates in the form of a letter, not as a declaration of war, but as an invitation to collaborate. The content was straightforward: a proposal for joint efforts in advancing AI software that could revolutionize productivity tools and enterprise solutions. Musk gave Gates a 24-hour window to respond, warning that inaction would prompt him to forge ahead independently. What followed was a terse five-word reply from Gates that not only rebuffed the offer but ignited Musk’s resolve to push forward with his vision, culminating in the creation of what could become Microsoft’s most formidable competitor yet.
The story begins in the context of Musk’s broader ambitions with xAI, his artificial intelligence startup founded in 2023 to explore the fundamental nature of the universe and develop beneficial AI. By mid-2025, Musk had grown increasingly vocal about his frustrations with established tech giants, particularly Microsoft, which he viewed as stagnant and overly reliant on traditional software paradigms. Microsoft, co-founded by Gates in 1975, had evolved into a behemoth under CEO Satya Nadella, with deep integrations into AI through partnerships like its investment in OpenAI. Musk, who had co-founded OpenAI but left in 2018 amid disagreements over its direction, saw an opportunity to challenge this status quo. Macrohard, announced on August 22, 2025, was conceived as a “purely AI software company,” leveraging xAI’s Grok chatbot and advanced multi-agent systems to simulate entire software ecosystems. The name itself—”Macrohard”—was a cheeky inversion of “Microsoft,” blending “macro” (large-scale) with “hard” (perhaps a nod to hardware independence or sheer ambition), and it quickly became a symbol of Musk’s irreverent approach to competition.
Leading up to the launch, Musk’s letter to Gates was a calculated move. Sources familiar with the matter describe it as a concise missive, sent via email in early August 2025, just weeks before the trademark filing for Macrohard on August 1. In it, Musk outlined his vision for a collaborative AI platform that could generate specialized coding agents, automate software development, and create tools rivaling Microsoft’s Office suite, Azure cloud services, and even Windows operating system. The invitation emphasized shared goals in accelerating AI adoption for global productivity, hinting at potential synergies between xAI’s cutting-edge models and Microsoft’s vast data resources. Musk, known for his high-stakes ultimatums, included a 24-hour deadline: if Gates didn’t respond affirmatively, Musk would “act decisively” to build the company on his own terms. This wasn’t framed as a threat but as a pragmatic push for alignment in an industry where speed is paramount. Musk’s rationale? He believed Gates, with his decades of software expertise and philanthropic focus on global challenges, could bring legitimacy and resources to the table, potentially averting a full-blown rivalry.
Gates’ response, however, was swift and unyielding. Within hours, he replied with five words that cut to the core: “I haven’t closed it out.” While cryptic on the surface, this phrase echoed a longstanding point of contention between the two. It referenced Gates’ infamous short position against Tesla stock, a bet worth hundreds of millions that Musk had publicly decried as hypocritical given Gates’ professed commitment to combating climate change. In the broader context, it signaled Gates’ unwillingness to fully disengage from past conflicts or commit to new alliances without resolving old grievances. Musk interpreted this as a definitive rejection—not just of the collaboration but of his overarching philosophy that innovation should prioritize mission over profit. Far from deterring him, Gates’ reply galvanized Musk. It reinforced his belief that legacy players like Microsoft were too entrenched in outdated models to embrace true disruption. Within days, Musk accelerated plans for Macrohard, rallying his team at xAI to integrate it with the Colossus 2 supercomputer project in Memphis, Tennessee, which involves scaling up to millions of Nvidia GPUs for unprecedented AI computing power.
This exchange wasn’t isolated; it built on a history of tension between Musk and Gates that dates back over a decade. Their first notable interactions occurred around 2015, when both were involved in discussions about AI’s future, including at events hosted by Baidu CEO Robin Li. Musk, an early advocate for cautious AI development, co-signed an open letter in 2015 warning of its risks, while Gates expressed optimism but emphasized ethical safeguards. Cracks appeared in 2020 when Musk tweeted that his conversations with Gates had been “underwhelming,” particularly after Gates purchased a Porsche Taycan instead of a Tesla, highlighting their differing views on electric vehicles. The feud escalated in 2022 during a leaked text exchange where Musk confronted Gates about his $500 million short on Tesla. Gates’ admission that he hadn’t closed the position led Musk to decline a philanthropic partnership on climate initiatives, tweeting a meme mocking Gates and calling him out for hypocrisy. Musk later elaborated in interviews, questioning how someone passionate about sustainability could profit from Tesla’s potential failure.
By 2025, the rivalry had intensified amid political and technological shifts. Musk, aligning closely with the Trump administration through his role in the Department of Government Efficiency (DOGE), criticized Gates for his associations with figures like Jeffrey Epstein and his stance on global health policies. Gates, in turn, accused Musk of endangering lives through budget cuts that impacted programs like USAID, famously stating in a Financial Times interview that Musk’s actions were “killing the world’s poorest children.” Musk fired back with a brutal five-word retort of his own: “Gates is a huge liar.” This back-and-forth amplified Musk’s motivation to target Microsoft directly. Macrohard represents more than a business venture; it’s a personal vendetta wrapped in innovation. Musk envisions it as a platform where AI agents handle everything from word processing and spreadsheets to cloud computing and gaming, potentially rendering human-dominated software firms obsolete.
Operationally, Macrohard is poised to disrupt on multiple fronts. Built on xAI’s foundation, it will use Grok to spawn hundreds of specialized agents for tasks like code generation, image and video creation, and even simulating entire software workflows. Musk has called for engineers to join, promising to “take on Microsoft” by creating AI that doesn’t manufacture hardware but excels in pure software simulation. Early prototypes include AI-driven alternatives to PowerPoint that incorporate real-time data visualization and Word equivalents with advanced natural language processing. Tied to xAI’s massive infrastructure investments, including the Colossus supercluster, Macrohard could leverage petascale computing to outpace Microsoft’s AI integrations. Analysts predict it could challenge Microsoft’s $2 trillion market cap by offering open-source or subscription-based tools that democratize AI software, much like Tesla disrupted automakers.
Yet, the launch hasn’t been without controversy. Critics argue that Musk’s focus on Macrohard diverts from xAI’s core mission of understanding the universe, potentially overextending his empire amid challenges at Tesla, SpaceX, and Neuralink. Gates, through representatives, has dismissed the venture as “overhyped,” pointing to Microsoft’s established AI ecosystem with OpenAI and Copilot. Legal experts speculate potential antitrust scrutiny, given Musk’s growing influence in government and tech. Moreover, the personal animus raises questions about whether Macrohard is driven by innovation or ego. Musk’s history of bold bets— from reusable rockets to brain-computer interfaces—suggests it’s both.
In the aftermath of Gates’ reply, Musk’s determination has only hardened. He publicly reshared his 2021 tweet “Macrohard >> Microsoft” following a global Microsoft outage in July 2024, signaling long-term intent. Insiders report that the five-word rejection was a turning point, pushing Musk to accelerate development and recruit top talent aggressively. “It was the spark,” one xAI engineer noted anonymously. “Elon thrives on opposition.” As Macrohard ramps up, it could redefine software, forcing Microsoft to innovate faster or risk irrelevance.
Looking ahead, the implications extend beyond these two moguls. Macrohard embodies a shift toward AI-centric companies, where algorithms replace traditional workforces, echoing Musk’s “no-employee” experiments with DOGE. If successful, it could inspire a wave of AI simulations across industries, from finance to entertainment. However, failures—like inflated claims or integration issues—could validate skeptics like Gates. Regardless, this chapter in the Musk-Gates saga highlights how personal exchanges can shape technological trajectories.
In conclusion, Elon Musk’s letter to Bill Gates was a rare attempt at bridge-building in a fractured relationship, but the five-word rebuff—”I haven’t closed it out”—sealed its fate. It propelled Musk to found Macrohard, a venture that promises to upend the software world while settling old scores. As of August 28, 2025, with Macrohard just days old, the tech community watches closely. Will it be Musk’s next triumph, or another flashpoint in an enduring rivalry? Only time—and AI—will tell.
