Elon Musk admits xAI needs total rebuild as 9 of 11 co-founders exit amid internal chaos
16 Sources
[1]
Staff complain that xAI is flailing because of constant upheaval
Elon Musk has ordered another round of job cuts at xAI after growing frustrated with the poor performance of its coding product, forcing out several more cofounders and parachuting in "fixers" from SpaceX and Tesla to audit the startup. The latest overhaul of the 2-year-old startup follows the
[2]
'Not built right the first time' -- Musk's xAI is starting over again, again | TechCrunch
And then there were two: Of the original eleven cofounders who kickstarted xAI with Elon Musk three years ago, only a pair remains as the deep learning lab continues a personnel overhaul to compete with Anthropic and OpenAI. That rebuilding, insists Musk, is by design. "xAI was not built right
[3]
Grok, Is This True? Musk Says xAI Needs to Be 'Rebuilt' As Co-Founders Flee
Elon Musk's xAI launched in 2023 with ambitions to take on OpenAI. But he now appears to be hitting the reset button on the startup. On Thursday, Musk tweeted, "xAI was not built right first time around, so is being rebuilt from the foundations up. Same thing happened with Tesla," which he took
[4]
Musk Pledges to Rebuild xAI as Another Co-Founder Departs
Elon Musk said he intends to rebuild his artificial intelligence startup, xAI, after a series of departures sparked uncertainty about the company's employee turnover and trajectory. "xAI was not built right first time around, so is being rebuilt from the foundations up," Musk said in a post on his
[5]
Musk ousts more xAI founders as AI coding effort falters, FT reports
March 13 (Reuters) - Elon Musk has triggered a fresh wave of job cuts at his AI firm xAI, with more co-founders pushed out amid his dissatisfaction with the underperformance of the startup's coding division, the Financial Times reported on Friday. Musk last month overhauled the management of xAI,
[6]
Elon Musk says xAI must be 'rebuilt' as co-founder exodus continues, SpaceX IPO awaits
Less than six weeks after Elon Musk merged SpaceX and xAI in a deal he valued at $1.25 trillion, the world's richest person is acknowledging that his artificial intelligence startup "was not built right first time around, so is being rebuilt from the foundations up." Musk took to X, which is now
[7]
Elon Musk is tearing xAI down to build it back up. Again.
The AI company he founded three years ago has lost six co-founders, is slashing staff, and trails badly in coding benchmarks. Musk's remedy: rebuild from scratch, for the second time. In March 2023, Elon Musk launched xAI with 12 co-founders and a stated ambition to build "the most powerful AI in
[8]
Elon Musk Is Dipping Into the Rejected Candidates Pile After Admitting xAI 'Was Not Built Right'
Just a few weeks after using his company SpaceX to acquire his AI company xAI, Elon Musk admitted that the latter "was not built right." That's exactly what people want to hear while you're pitching possibly the largest initial public offering ever. On X (another company he owns), Musk said that
[9]
Elon Musk admits xAI 'wasn't built right' as only 2 co-founders remain and its biggest AI bet stalls out | Fortune
Elon Musk said he is rebuilding xAI from the ground up just a month after SpaceX acquired his AI startup in one of the biggest mergers of all time. Following a gradual exodus from xAI, the world's richest man is trying to reimagine the company with heightened ambitions. The Tesla and SpaceX CEO
[10]
Elon Musk Orders Sweeping Layoffs as xAI Fails to Catch Up
In a Thursday tweet, Elon Musk said he was looking to rebuild his AI startup xAI "from the foundations up" after admitting it wasn't "built right first time around." The news comes amid a major exodus of cofounders, with a striking majority of them jumping ship over the last year. Amid the
[11]
Musk admits xAI 'not built right' -- weeks after Tesla invested $2 billion
Elon Musk admitted today that xAI, his artificial intelligence venture, "was not built right first time around" and "is being rebuilt from the foundations up." The admission comes just six weeks after he had Tesla pour $2 billion of shareholder money into the company. The timing is remarkable.
[12]
Elon Musk Admits xAI "Wasn't Built Right" -- and Is Rebuilding the Company From Scratch
Elon Musk says that xAI "wasn't built right the first time," and is now being "rebuilt from the foundations up." Musk made the comment in an X post, in reference to the news that two product and engineering leads at AI coding company Cursor, Jason Ginsberg and Andrew Milich, had joined xAI.
[13]
Musk ousts more xAI founders as AI coding effort falters, FT reports - The Economic Times
Elon Musk has triggered a fresh wave of job cuts at his AI firm xAI, with more cofounders pushed out amid his dissatisfaction with the underperformance of the startup's coding division, the Financial Times reported on Friday. Musk last month overhauled the management of xAI, ahead of a planned
[14]
Elon Musk Admits xAI Passing On Promising Candidates -- Launches New Hiring Review
Artificial intelligence startup xAI is undergoing a major reset after problems in its early hiring process, Elon Musk said. "Many talented people over the past few years were declined an offer or even an interview at xAI. My apologies," Musk wrote on X last week. "Baris Akis and I are going
[15]
Musk pushes out more xAI co-founders amid coding division struggles By Investing.com
Investing.com -- Elon Musk has initiated another round of job cuts at his artificial intelligence company xAI, with additional co-founders departing as Musk expressed dissatisfaction with the startup's coding division performance, the Financial Times reported on Friday. Last month, Musk
[16]
xAI in Internal Crisis: Elon Musk Suggests a Complete Rebuild
Elon Musk's artificial intelligence start-up is weathering a period of turbulence marked by the departure of co-founders and controversies surrounding its Grok chatbot. The entrepreneur acknowledges that the company must be deeply reorganized. Less than six weeks after the merger between SpaceX
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Elon Musk acknowledged that xAI wasn't built right the first time and requires a complete rebuild from the ground up. The admission comes as the AI startup hemorrhages talent, with only 2 of 11 original co-founders remaining after a brutal restructuring driven by its failure to compete with OpenAI and Anthropic in AI coding tools.
Elon Musk Admits xAI Rebuild Necessary After Mass Co-Founder Departures
Elon Musk publicly acknowledged that xAI "was not built right first time around, so is being rebuilt from the foundations up," drawing comparisons to his earlier restructuring of Tesla . The stark admission comes amid a wave of co-founder departures that has left only two of the original 11 co-founders—Manuel Kroiss and Ross Nordeen—remaining at the three-year-old AI startup
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. This week alone saw the exit of Zihang Dai, one of the most senior technical staff members, and Guodong Zhang, who led pre-training of Grok models and confirmed Thursday as his last day after being blamed for issues with the company's coding product5
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Source: ET
AI Coding Underperformance Triggers Internal Upheaval at xAI
The internal upheaval at xAI stems primarily from the startup's failure to compete effectively in AI coding tools, a critical revenue-generating area where rivals have surged ahead. Musk grew increasingly frustrated with the poor performance of xAI's coding product, which has lagged significantly behind Anthropic's Claude Code and OpenAI's Codex
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. During a town hall meeting last month, Musk publicly criticized the coding team for falling behind, detailing a reorganization that had already pushed out several co-founders including Greg Yang, Tony Wu, and Jimmy Ba1
. The pressure intensified after xAI merged with SpaceX in a $1.25 billion deal, with Musk racing to meet a June deadline for what could be the biggest IPO in history1
.SpaceX and Tesla Personnel Brought In to Audit and Fire Staff
Musk deployed managers from SpaceX and Tesla to review xAI employees' work, with these "fixers" firing several staff members after determining their efforts were inadequate
1
. One critical focus area has been the quality of data used to train the models, identified as a key reason the coding product failed to gain traction with paying individual users or businesses1
. The heavily loss-making AI startup, which reportedly burns about $1 billion in cash per month, has struggled to establish its Grok chatbot and coding products in a market dominated by competition with OpenAI and Anthropic3
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Source: Electrek
Low Staff Morale and Employee Turnover Plague xAI Operations
Staff have complained that the constant upheaval is destroying morale and preventing xAI from achieving its potential, according to multiple sources
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. Researchers continue to quit due to burnout from Musk's "extremely hardcore" work demands or after receiving better offers from rivals5
. Haotian Liu, who worked closely with departing co-founder Guodong Zhang, also left xAI citing burnout4
. Despite a memo sent to employees on Wednesday denying mass layoffs, the job cuts and departures have left xAI with numerous roles to fill1
.Related Stories
Aggressive Talent Acquisition Strategy Targets Rejected Candidates
In response to the talent exodus, Musk launched an aggressive talent acquisition campaign, personally apologizing for past hiring mistakes. "Many talented people over the past few years were declined an offer or even an interview at xAI. My apologies," Musk posted, announcing he and Baris Akis would review the company's interview history to reach out to promising candidates
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. Recruiters have been contacting unsuccessful candidates from previous interviews, often offering better financial terms than initially proposed1
. The company scored a notable win by poaching Andrew Milich and Jason Ginsberg from Cursor, a leading AI coding startup currently in fundraising discussions at a $50 billion valuation, to help improve the "Grok Code Fast" product4
.Macrohard Project Pivots to Joint Effort with Tesla's Optimus
The Macrohard project, which Musk described as the "most important" initiative aimed at building digital agents capable of replicating entire software companies, has undergone significant changes
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. Toby Pohlen, a former DeepMind researcher put in charge of the project, departed just 16 days after his appointment1
. Musk has now redeployed Ashok Elluswamy, head of AI software at Tesla, to reboot the Macrohard effort, revealing it as a joint xAI-Tesla project that will combine with "Digital Optimus" development3
. The vision involves using xAI's large language models to direct Tesla's agent as it performs tasks, with Musk explaining that Digital Optimus AI serves as the instinctive "System 1" while Grok functions as the thinking "System 2"3
. For comparison, xAI has just over 5,000 employees, trailing OpenAI's more than 7,500 staff and roughly matching Anthropic's over 4,700 employees2
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Source: The Next Web
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