UPDATE: Neuralink claims that it filed for federal diversity certification by accident

After an investigation from Musk Watch found that Neuralink, Musk's brain-machine implant startup, had self-certified as a "Small Disadvantaged Business" (SDB) with the federal government, the company claimed the certification was made in error. "Neuralink has never applied for nor received a benefit from the federal government. The box on the SAM.gov was erroneously checked and has since been updated," a Neuralink spokesperson told CNBC.

The box declaring Neuralink as an SBD was "erroneously checked" on 11 separate federal forms from 2017 to 2025.

Within the past few days, the company removed its listing entirely on SAM.gov, the System for Award Management website for federal contractors and grant recipients. However, Neuralink remains listed as a "Self-Certified Small Disadvantaged Business" on the Small Business Administration's searchable database.

Companies that are certified SDBs can receive preferential treatment when applying for grants and contracts from the government. They also receive increased visibility on government contracting databases.

SDBs must be majority owned and controlled by individuals who are "socially disadvantaged and economically disadvantaged." Musk, who has frequently condemned federal diversity and affirmative action programs, does not meet either of those requirements.

Trump doesn't want xAI to receive government contracts

Donald Trump does not want Elon Musk's artificial intelligence startup to receive government contracts, according to White House press secretary Karoline Leavitt. The president's opposition toward xAI wasn't made public after the company received a Defense Department contract worth up to $200 million last week.

"Does President Trump support federal agencies contracting with Elon Musk's AI company?" one reporter asked Leavitt during a White House press conference on Wednesday. "I don't think so, no," she said.

The reporter then asked whether Trump would "want the DOJ to cancel the contract" with xAI, to which Leavitt answered, "I'll talk to him about it, yes." (The reporter may have been referring to xAI's deal with the DOD, as the company does not appear to have a contract with the Justice Department.)

Leavitt's comments came shortly after a bipartisan group of lawmakers criticized Grok, the xAI chatbot that has generated praise for Adolf Hitler. "xAI's failure to take reasonable measures to mitigate against its AI models from engaging in hate speech is reckless, unacceptable, and antisemitic," the lawmakers, led by Senator James Lankford (R-OK) and Senator Jacky Rosen (D-NV), wrote in a joint letter to Musk.

Meanwhile, according to a former Pentagon AI lead who spoke to NBC News, the inclusion of xAI in the Defense Department's public-private AI initiative came "out of nowhere." While the Pentagon awarded similar contracts to OpenAI, Google, and Anthropic, those deals had been under review since the Biden administration. "There had not been a single discussion with anyone from X or xAI, up until the time I left," said Glenn Parham, the former Pentagon employee who left the government in March.

At any rate, past support for Hitler generated by Grok, including a call for another Holocaust, is not disqualifying for the Pentagon. "Several frontier AI models have produced questionable outputs over the course of their ongoing development, and the Department will manage risks associated with this emerging technology area throughout the prototype process," the Defense Department told NBC News, adding, "These risks did not warrant excluding use of these capabilities as part of DoD’s prototyping efforts."

XAI looks to raise $12 billion for Nvidia chips

Weeks after raising $10 billion by selling stock and issuing debt, xAI is working with a private investment firm led by a close ally of Musk as it seeks to raise an additional $12 billion to train Grok. From the Wall Street Journal:

Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital. The money would be used to buy a massive supply of advanced Nvidia chips that would be leased to xAI for a new jumbo-sized data center meant to help train and power the AI chatbot Grok.

Musk needs all the financial firepower he can get to stay competitive in a wild and costly AI battle with well-funded rivals like Google, Microsoft and Meta. Grok hasn’t gained nearly as much traction as OpenAI’s ChatGPT and took a reputational hit earlier this month when it posted racist and controversial comments to users on the social-media platform X. The startup apologized for what it called “horrific behavior.”

With xAI’s balance sheet already stretched, Musk is getting creative to keep the money flowing. SpaceX recently invested $2 billion into xAI, effectively moving cash from the coffers of one Musk company to fund another. For the $5 billion in debt xAI raised in June, the company pledged its most prized asset—the intellectual property behind Grok—as part of the collateral, people familiar with the situation said.

Last weekend, Musk conveyed his newfound commitment to developing Grok in a post on X, writing, "I resisted AI for too long. Living in denial. Now it is game on." Earlier this year, xAI was reportedly on pace to spend more than $1 billion a month, although that number could be higher now with Musk attempting to deploy 1 million graphics processing units to power Grok.

In other xAI news:

• In an effort to train Grok to read and mimic human facial expressions, xAI asked company employees to record videos of their faces and conversations with coworkers, according to Business Insider. While the xAI engineer leading the project reportedly said the videos would only be used "to teach Grok what a face is," workers who took part in it were required to sign a consent form that granted xAI "perpetual" access to their "likeness" for training purposes and "inclusion in and promotion of commercial products and services offered by xAI."

• X, the social media company owned by xAI, has refused to grant access to its recommendation algorithm to officials in France. "French authorities have launched a politically-motivated criminal investigation into X over the alleged manipulation of its algorithm and alleged fraudulent data extraction," the company said. "X categorically denies these allegations." French prosecutors are investigating X over concerns that the platform is being used to launder foreign influence.

• Musk said that xAI is developing Baby Grok, a kid-friendly app.

• XAI has purchased a former Duke Energy power plant in Southaven, Mississippi. The plant is a short distance away from its Colossus supercomputer facility in South Memphis.

Musk warns of 'rough' times ahead for Tesla as profits slump

On Wednesday, Tesla reported a 23% drop in adjusted net income for the second quarter of 2025, a $419 million decline from the same period last year. Its net income dipped 16% for the quarter, while revenue from its core auto division also declined by 16%. It marked the third consecutive quarter of falling profits for Tesla.

“If Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy, it will be the most valuable company in the world,” Musk said during the call. He added that “there will be some teething pains” as the company invests in robotics and autonomous driving.

During a Wednesday conference call with analysts, Musk said Tesla was in "a weird transition period where we'll lose a lot of incentives in the U.S.," referring to the electric vehicle tax credits and environmental regulatory credits that are being phased out as part of Trump's tax and spending legislation. (Revenue from Tesla’s lucrative sale of regulatory credits dropped 51% in Q2 of this year.)"We probably could have a few rough quarters," he added. "I'm not saying we will, but we could."

Musk also made a wild prediction: Tesla will "probably have autonomous ride hailing in probably half the population of the U.S. by the end of the year." As of now, Tesla's Robotaxi program is only operating in a small part of Austin, Texas, as part of a heavily supervised demonstration that includes multiple layers of human oversight.

Tesla stock fell 8.2% on Thursday and has now declined by more than 24% year-to-date.

In other Tesla news:

• Trump offered words of encouragement to Musk following Tesla's lousy week. "Everyone is stating that I will destroy Elon's companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government," the president wrote in a Truth Social post on Thursday. "This is not so! I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!" Musk then responded to Trump indirectly on X, writing, "The 'subsidies' he's talking about simply do not exist. DJT has already removed or put an expiry date on all sustainable energy support while leaving massive oil & gas subsidies untouched. SpaceX won the NASA contracts by doing a better job for less money. Moving those contracts to other aerospace companies would leave astronauts stranded and taxpayers on the hook for twice as much!"

• Musk had offered an olive branch to Trump last week, questioning the Wall Street Journal's story on a birthday note that Trump reportedly wrote to Jeffrey Epstein. "The letter sounds bogus," Musk said.

• In California, the largest EV market in the U.S., Tesla's sales have declined for seven straight quarters. Tesla's share of the nationwide electric vehicle market has also dropped significantly as traditional automakers release new models, including more affordable ones.

• During the Wednesday call with analysts, Musk lobbied to secure more control over Tesla. "It is a big deal. I don’t want to find I have so little control I can be easily ousted by activist shareholders," he said. "That is a major concern to me as I’ve mentioned in the past, and I hope that is addressed at the upcoming shareholders meeting." Musk owns approximately 13% of Tesla.

• An information and technology executive at Tesla is running the company's sales team, despite having no relevant experience, according to Reuters.

Trump looks to SpaceX competitors for Golden Dome contracts

SpaceX, Musk's rocket and satellite company, was initially considered a favorite to reap billions of dollars from the construction of President Trump's missile defense system. The so-called Golden Dome will consist of a network of hundreds of satellites and require a considerable number of rockets to launch them. SpaceX is the industry leader in both fields.

But as a result of Musk's messy quarrel with Trump, the White House is now looking to partner with SpaceX competitors for the project. From Reuters:

The Trump administration is expanding its search for partners to build the Golden Dome missile defense system, courting Amazon.com's Project Kuiper and big defense contractors as tensions with Elon Musk threaten SpaceX's dominance in the program, according to three sources familiar with the matter…

Project Kuiper, which has launched just 78 of a planned constellation of 3,000 low-earth orbit satellites, has been approached by the Pentagon to join the effort, signaling the administration's openness to integrating commercial tech firms into national defense infrastructure and going beyond traditional defense players.

Jeff Bezos, Amazon's executive chairman, told Reuters in January that Kuiper would be "primarily commercial," but acknowledged "there will be defense uses for these [low-earth orbit] constellations, no doubt."

In the search for more vendors for the satellite layers of Golden Dome, "Kuiper is a big one," a U.S. official said.

While SpaceX remains a frontrunner due to its unmatched launch capabilities, its share of the program could shrink, two of the people said. Officials have reached out to new entrants like rocket companies Stoke Space and Rocket Lab are gaining traction and will be able to bid on individual launches as the program matures, according to the U.S. official.

There are other companies the Pentagon could look to develop the satellite portion of the Golden Dome, including L3 Harris and Kuiper. But the Pentagon remains largely reliant on SpaceX to launch its satellites at low cost and on time, a fact that Musk is aware of. "Federal acquisition regulations require using the best provider at the best price," he wrote in a post on X in response to the Reuters report. "Anything else would be breaking the law."

To Musk's point, the Wall Street Journal reported last week that Trump aides explored slashing SpaceX contracts but found that most were vital for the Pentagon and NASA.

As for Bezos, CNBC reported that the Amazon founder met with Trump at the White House last week. He has previously sought to bolster his relationship with Trump by neutering the Washington Post's editorial page and donating $1 million to the president's inaugural fund. Dave Limp, the chief executive of Bezos's fledgling rocket company, Blue Origin, also visited the White House following the Trump-Musk split.

In other SpaceX news:

• As part of a filing that disclosed "risk factors" associated with investing in SpaceX, the company warned shareholders that Musk could resume his involvement in U.S. politics, according to Bloomberg. The disclosure appears to be the first time that SpaceX has acknowledged the potential risk to the company posed by its CEO's political activities. Musk's backing of Trump's campaign last year and his subsequent work in the White House reaped some benefits for SpaceX. But his fallout with the president could result in the company missing out on future federal funds. As for Musk's future political entanglements, he said this month that he plans to launch a new political party to unseat Republican lawmakers who helped pass Trump's signature tax and spending bill.

• The injury rate among workers at SpaceX's Starbase facility exceeds the industry norm, according to Occupational Safety and Health Administration data analyzed by TechCrunch.

• From the Alaskan ferry system to the National Science Foundation's facilities in Antarctica and Customs and Border Protection outposts, FedScoop found that state and federal authorities across the U.S. are expanding their use of Starlink, the satellite internet provider owned by SpaceX.

• On Thursday, shortly after launching its direct-to-device cellular satellite service with T-Mobile, Starlink suffered a major outage that lasted for several hours. "Sorry for the outage," Musk wrote on X. "SpaceX will remedy root cause to ensure it doesn’t happen again." Michael Nicolls, the vice president of Starlink Engineering, said the outage, which impacted users in North America and Europe, was caused by the failure "of key internal software services that operate the core network."

• "With as few as 419 Starlink customers in an area the size of Tacoma, Washington, service for all users in the area could become unusable," the Washington Post reported, citing new research from telecommunications expert Sascha Meinrath. The limitations of Starlink are notable given that the Trump administration pushed for the company to receive a sizable portion of a $42 billion federal broadband access program.

Neuralink plans to implant devices in 20,000 brains annually by 2031

Separately, Bloomberg reported this week that by 2031, Neuralink plans to generate $1 billion in annual revenue by planting its devices in 20,000 patients every year. The company plans to carry out its machine-brain implant operations at five large clinics. One of the implants Neuralink is developing is called Telepathy, which allows quadriplegic patients to control a computer with their minds. Another implant, Blindsight, is being designed to provide vision to blind patients. And a third Neuralink product, called Deep, is marketed as a treatment for Parkinson's disease.

Tesla opens 'retro futuristic' diner in Los Angeles

Tesla opened a 24-hour "retro-futuristic" diner in Los Angeles on Monday that features two giant drive-in style movie screens and 80 Supercharger stations for electric vehicles. Servers at the diner deliver food on roller skates while Optimus humanoid robots awkwardly serve up containers of popcorn. The countertops are stocked with Tesla merchandise for purchase, including miniature Optimus action figures.

The menu was created by chef Eric Greenspan and includes a $13.50 "Tesla Burger" with "Electric Sauce" and a $9 grilled cheese with optional "Epic Bacon," among other classic diner grub. The restaurant's potato products are all fried in beef tallow, possibly a nod to Robert F. Kennedy Jr.'s "Make America Healthy Again" movement, which considers rendered animal fats a superior alternative to seed oils.

The location is situated in West Hollywood, a predominantly progressive area, making it a prime venue for anti-Musk protests. One such demonstration, organized by the Tesla Takedown movement, is scheduled to take place on Saturday, according to The Verge. "It’s in West Hollywood," Joel Lava, a Tesla Takedown organizer, told the outlet. "I think it's safe to say that Elon Musk is not a popular figure in West Hollywood. So I don't think it’s going to be hard to protest it."

Musk has hinted at opening additional Tesla Diners in locations across the U.S., including in Starbase, Texas, the company town controlled by SpaceX. "If our retro-futuristic diner turns out well, which I think it will, @Tesla will establish these in major cities around the world, as well as at Supercharger sites on long distance routes," he wrote in a Monday post on X. "An island of good food, good vibes & entertainment, all while Supercharging!"