Elon Musk's artificial intelligence company xAI has embarked on a major organizational restructuring. As key personnel including co-founders have departed in succession, Musk declared he is "rebuilding the company from the ground up."
Co-founders Leave in Droves—Most Founding Members Gone
xAI has experienced a wave of key talent departures recently. According to Business Insider and other outlets, co-founders Zihang Dai and Guodong Zhang recently left the company.
Earlier this year, co-founders Toby Pohlen, Jimmy Ba, Tony Wu, and Greg Yang also departed after January.
Of the 11 founding members who launched the company with Musk in 2023, only Manuel Kroiss and Ross Nordeen remain. Twelve senior engineers have also reportedly left recently.
Guodong Zhang was a key figure who reported directly to Musk and oversaw major projects including "Grok Code" and the image and video generation model "Grok Imagine." Before joining xAI, he worked at Google DeepMind and earned his doctorate from the University of Toronto.
"Rebuilding the Company from Scratch"—Musk's Restructuring
Musk characterized the talent exodus not as a crisis but as part of organizational restructuring.
In a post on X (formerly Twitter) on the 13th (local time), he wrote: "xAI was not built right from the start. So we are now rebuilding it from the ground up."
At a company-wide meeting in February, Musk emphasized the need for restructuring, stating that "people who were right for the early startup phase may not be the right fit after the company has grown."
This restructuring intensified immediately after SpaceX acquired xAI.
Musk cited an "orbital data center" concept as the key reason for the SpaceX acquisition. He argues that processing AI computations in space using SpaceX satellites could create the cheapest AI computing infrastructure within two to three years.
SpaceX has reportedly submitted plans to U.S. authorities to launch up to one million satellites for this purpose.
Falling Behind in AI Race? Musk Admits "Coding Still Lacking"
Musk offered a candid assessment of xAI's technical competitiveness. At the Abundance Conference, he acknowledged that "Grok is currently behind competitors in coding."
Musk explained his late arrival at the event was due to "a company-wide meeting on coding," adding that "we are working to surpass competitors, and we will get there."
xAI's core AI projects currently include four major initiatives: Grok (chatbot and voice AI), Grok Code (AI coding model), Grok Imagine (image and video generation AI), and Macrohard (a project for AI software targeting digital agent-based enterprise solutions).
Macrohard, in particular, aims to develop AI agents that automate most white-collar tasks.
However, development has reportedly been suspended after project leader Toby Pohlen left the company just weeks after taking the position.
The AI Talent War—"Reviewing Previously Rejected Applicants"
Alongside the restructuring, Musk has entered the competition for AI talent. xAI recently recruited Andrew Milich and Jason Ginsberg from AI coding startup Cursor.
However, the limited pool of AI researchers poses a challenge.
On X, Musk wrote: "Over the past few years, many talented people did not receive job offers from xAI or even get interview opportunities. I apologize." He added that the company is now reviewing previously rejected applicants.
Industry observers note that "model competitiveness ultimately depends on talent acquisition."
Since its founding in 2023, xAI has grown rapidly as an AI startup competing with OpenAI, Anthropic, and others through its Grok model.
However, the recent talent exodus and organizational restructuring are also being interpreted as risk factors by investors.
With SpaceX preparing for an IPO at a valuation of approximately $1.5 trillion, xAI's growth potential and stability are considered crucial variables in evaluating Musk's overall AI strategy.