I feel like I should know the answer to this, but I don't think I do.
The Gray tensor product of 2-categories $C$ and $D$ is a "fattening up" of the cartesian product $C\times D$ in which the equality $(f,1)(1,g) = (1,g)(f,1)$ is replaced by a 2-morphism. Nowadays the term "Gray tensor product" more often seems to refer to the pseudo version in which these 2-morphisms are invertible, but Gray's original version was "lax" (or colax) and had them not necessarily invertible.
The Gray tensor product has a universal property
$$ \mathrm{Fun}_{\mathrm{strict}}(C\otimes_w D, E) \cong \mathrm{Fun}_{\mathrm{strict}}(C, \mathrm{Fun}_w(D,E)) $$
where $\mathrm{Fun}_w$ denotes the 2-category of strict 2-functors and $w$-natural transformations. One can also spell out explicitly the morphisms which are represented by $C\otimes_w D$ as a sort of "$w$-cubical functor"; these can be identified with a certain class of $w$-functors $C\times D\to E$ which are strict in certain ways.
In sum, the Gray tensor product is a beautiful thing for talking about strict 2-functors and all sorts of weak natural transformations. My question is, what happens when we move to pseudo 2-functors? I'm happy to keep my 2-categories strict and not to worry about lax or oplax 2-functors. Is there an equivalence of bicategories
$$ \mathrm{PsFun}_{\mathrm{pseudo}}(C\otimes_w D, E) \simeq \mathrm{PsFun}_{\mathrm{pseudo}}(C, \mathrm{PsFun}_w(D,E)) $$
where ${\mathrm{PsFun}_w (-,-)}$ denotes the 2-category of pseudofunctors and $w$-natural transformations? This is true when $w=$ pseudo, since in that case $C\otimes D$ is equivalent to $C\times D$ as a bicategory, and the tricategory of bicategories is cartesian closed with internal-hom $\mathrm{PsFun}_{\mathrm{pseudo}}$. But what about when $w=$ lax?
Best Answer
This wants to be a track, I have not checked the details in their entirety
bibliography:
[G] J.W Gray Formal Category Theory: Adjointness for 2-Categories (Lnm 391).
Consider at first normal pseudo-funtors (on 2-cetegories) we call a pseudo.functor $F: \mathcal{A}\to\mathcal{B}$ normal if for any $A$: $F(1_A)=1_{FA}$ and the canonical isomorphism is the identity. Let $Fun_{np}(\mathcal{A}, \mathcal{B})$ the category of normal pseudofuntors and lax-transformations (with modifications too, is a 2-category). Now a normal pseudfunctor $F:\mathcal{A}\to Fun_{np}(\mathcal{B}, \mathcal{C})$ give a family of normal pseudofunctors
$(F(A, -): \mathcal{B}\to \mathcal{C})_{A\in \mathcal{A}}$
$(F(?, B): \mathcal{A}\to \mathcal{C})_{B\in \mathcal{B}}$
such that $F(A, -)(B)= F(?, B)(A)$ and for $f: A\to A',\ g: B\to B'$ a 2-cell $\gamma_{f, g}$ (the $g$-component of the lax transformation $(F(f): F(A, -)\rightarrow F(A', -) $)
as in the diagram of [G] p. 57, which verify the properties $QF_21, QF_22,\ QF_23$ of of [G] p. 57. We call this "data" a normal quasi-pseudo-funtor. Similarly a 2-cell to induce what is called a lax transformation between normal quasi-pseudo-funtor.
mutually this data describe exactly a normal pseudofuctor $F:\mathcal{A}\to Fun_{np}(\mathcal{B}, \mathcal{C})$ (this is sketched in [G] p. 60 for 2-functors) and this involve also lax-transformation, then we have a (isomorphism):
$Fun_{np}(\mathcal{A}, Fun_{np}(\mathcal{B}, \mathcal{C}))\cong n.q.p-Fun(\mathcal{A}\times \mathcal{B}, \mathcal{C})$
where the right member is the category (2-category) of normal quasi-pseudo-funtors and lax transformation (and modifications).
Now I think that exist a natural the isomorphism: $n.q.p-Fun(\mathcal{A}\times \mathcal{B}, \mathcal{C})\cong Fun_{np}(\mathcal{A}\otimes_w \mathcal{B}, \mathcal{C})$.
This follow as in [G] p.73,74,75, 76,77 (using also coherence criterion for pseudofunctor)
EDIT: the part about general pseudofunctors (no normal) , I'm working about...
Now consider general pseudo functors.
Let
[B] Introduction to Bicategories , J. Benabou.
Its enough show a natural equivalence $Fun_{pn}(\mathcal{A},\mathcal{B})\simeq Fun_{p}(\mathcal{A},\mathcal{B})$ where the latter member is the category of pseudo-functors and lax transformations.
These is a full inclusion $Fun_{pn}(\mathcal{A},\mathcal{B})\subset Fun_{p}(\mathcal{A},\mathcal{B})$ For $(F, \phi)\in Fun_{p}(\mathcal{A},\mathcal{B})$ give a natural construction of a 2-isomorphism (a lax transformation with isomorphisms components) $\eta_F: (F, \phi)\to N((F, \phi))$.
We have that $(F, \phi)$ consist of
a family of functors $F_{A,B}: \mathcal{A}(A, B)\to \mathcal{B}(FA, FB)$
a family of isomorphisms $\phi_A: I_{FA}\to F(I_A)$
a family of 2-isomorphisms $\phi_{f, g}: F(g)\circ F(f)\rightarrow F(g\circ f)$
with the usual coherence conditions M1, M2 p. 30 of [B].
Then define the normal $N((F, \phi))$ as $(F', \phi')$ where:
$F'(A):=F(A)$ for each object $A$ of $\mathcal{A}$ different form any $I_B$, and $F'(I_A):= I_{FA}$.
Let $F_{A, B}:= F_{A,B}$ for each couple of object $A,\ B$ of $\mathcal{A}$ both different form any $I_B$.
let $F'_{A, I_B}: \mathcal{A}(A, I_B)\xrightarrow{F_{A,B}}\mathcal{B}(F(A), F(I_B))\xrightarrow{(1, \phi_A^{-1})}\mathcal{B}(F(A), I_{F(B)}) $ (for $A$ different form any $I_B$)
Similarly we define $F'_{I_A, B}$ and $F'_{I_A, I_B}$.
Then let $\phi'_ A:=1: I_{F'A}\to F'(I_A)$
and define $\phi'_ {f, g}:= \phi_{f, g}$ if $g: B\to C$, $f: A\to B$ and each $A,\ B,\ C$ different form any $I_B$.
if for example only the codomain of $g$ is not of this type i.e. $g: B\to I_C$ then let
$\phi'_{f, g}: F'(g)\circ F(f)=\phi_C^{-1}\circ F(g)\circ F(f)\xrightarrow{\phi_C^{-1}\circ\phi_{f,g}} \phi_C^{-1}\circ F(g\circ f)=F'(g\circ f)$
Similarly we define $\phi'_{f, g}$ also if other of the objects $A,\ B, C$ are of type $I_D$ for some object $D$.
remains the verification of the conditions of consistency, but this follow from the general criterion of coherency for pseudo-functors (S. MacLane, R. Paré, "Coherence for bicategories and indexed categories") or for direct verification