Elon 💙 Microsoft

Hey there!

It's Tuesday, and these are the only four AI stories worth your attention this week.

Let's get into it 👇

AI coding agents: The end of grunt work is here

Microsoft and OpenAI both launched coding agents this week that handle bugs, refactors, and documentation automatically. Big tech says 30% of their code is already AI-generated.

What just happened:

• Monday: Microsoft dropped a Copilot "coding agent" built on Claude 3.7

• Friday: OpenAI released Codex that runs tasks in parallel

How it works: Developer selects a repo, AI scans tests and docs, then adds features, fixes bugs, and upgrades dependencies. Human reviews, tests, and merges.

The downside: Code that compiles isn't necessarily correct. Hidden errors can appear months later. Junior dev jobs may disappear while architect roles become more valuable.

Welcome to "vibe coding" - where engineers prompt AI to rough-draft code, then iterate. The competitive edge shifts from typing skills to creativity and domain expertise.

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Former Cisco CEO: AI requires yearly reinvention

John Chambers says AI moves "5× faster" than the internet revolution did. Refreshing strategy every 2-3 years is now dangerously slow.

"As a leader in AI, you have to reinvent yourself every year," Chambers said on the Grit podcast. His proof? A portfolio company grew revenue 100% YoY while cutting headcount 10% through AI automation.

What "reinvention" means now:

• Constantly resegment customers around new AI capabilities

• Embed AI across your entire product and operation

• Shorten release cycles and move to usage-based pricing

• Hire fewer, higher-leverage roles

McKinsey and BCG report 40% of their client work is now Gen-AI focused. The timeline for becoming obsolete has compressed dramatically.

U.S. electricity demand could jump 78% by 2050

A new ICF study projects electricity demand will grow 25% by 2030 and 78% by 2050 versus 2023, driven by AI data centers, manufacturing, crypto mining, and EVs.

The numbers:

• Peak load: 803 GW (2023) → ~1,000 GW (2030) → 1,233 GW (2050)

• Capacity needed: 80 GW of new power generation annually (double the current pace)

• Price impact: Retail electricity rates could rise 15-40%

Hot spots: Dominion (PJM), Southern Company (SERC), and ERCOT West (Texas) face the fastest growth. California's demand comes from EVs and data centers, Texas from crypto and manufacturing.

The U.S. grid faces a build-or-bust decade to keep AI servers, EV chargers, and factories running.

Microsoft adds Musk's Grok to Azure

Microsoft is already OpenAI's biggest backer, but it's adding Elon Musk's Grok to Azure's "model buffet" alongside 1,900 other options. This gives Musk enterprise credibility and helps Microsoft woo customers who don't want to lock into OpenAI or Google.

Azure's growing AI lineup:

• OpenAI GPT-4o: Flagship with deep Copilot integration

• Anthropic Claude 3.7: Powers GitHub coding agent

• Meta Llama 3: Open-weight, lower cost

• xAI Grok 3: New addition with Musk's "spicier" style

Satya Nadella is broadening Azure's offerings to avoid being seen as "OpenAI-only." The competitive landscape blurs as everyone races to launch similar products. For Microsoft, every new model means more GPU and cloud revenue - even if it means partnering with its partners' rivals.