Elon Musk’s artificial intelligence startup xAI laid off employees this week as part of a company-wide reorganization, the billionaire confirmed on Wednesday, as half of the company’s 12 co-founders have now left the three-year-old firm.
Co-founders Tony Wu and Jimmy Ba announced their resignations on February 9 and 10, joining four other founding members who previously departed. At least 10 engineers publicly announced exits in the past week, though some departures occurred weeks earlier.
Musk addressed the personnel changes during an all-hands meeting on Wednesday, according to Reuters, saying the company reorganized to improve efficiency as it scales.
“We’re organizing because we’ve reached a certain scale,” Musk said in video footage the company posted on X. “Now, naturally, when this happens, there’s some people who are better suited for the early stages of a company and less suited for the later stages.”
The changes follow SpaceX’s announcement last week that it acquired xAI in a deal valuing the combined entity at $1.25 trillion. The merged company plans to pursue an initial public offering later this year.
xAI reorganized into four primary divisions under the new structure. Aman Madaan leads the Grok chatbot and voice product team, while Manuel Kroiss heads coding models and machine learning infrastructure. Co-founder Guodong Zhang runs the Imagine multimedia team, and Toby Pohlen oversees Macrohard, which focuses on automating company processes through AI agents.
Musk emphasized coding as a priority area during the meeting, predicting Grok Code will become “state of the art” within two to three months in a field where OpenAI and Anthropic compete heavily.
“Things will move, maybe even by the end of this year, to where you don’t even bother doing coding,” Musk said. “The AI just creates the binary directly.”
Wu, who led reasoning efforts at xAI, wrote in his departure announcement that he resigned to pursue new opportunities. “It is an era with full possibilities: a small team armed with AIs can move mountains and redefine what’s possible,” he posted on X.
Ba, who oversaw research and safety, posted that he left as AI enters a transformative period. “We are heading to an age of 100x productivity with the right tools,” he wrote.
Other departing engineers include Shayan Salehian, who worked on product infrastructure and left to start something new, and Hang Gao, who contributed to the Grok Imagine video generation tool. Several engineers indicated plans to build new ventures with other former xAI colleagues.
The exits come as xAI faces regulatory scrutiny after its Grok chatbot generated nonconsensual explicit deepfakes that circulated on X. French authorities raided X offices last week as part of an investigation into child abuse images and deepfakes.
Read: French prosecutors raid X Paris offices, summon Musk
Despite the departures, xAI maintains over 1,000 employees and continues recruiting, Musk said during the meeting.
“We are hiring, and we’re looking for intelligent and smart people,” he said. “This is not an easy place to work … It’s a grind, but we have, I guess, like interstellar ambitions.”
The company highlighted access to a 1 million Nvidia H100 GPU-equivalent training cluster as a draw for AI researchers. Executives also outlined long-term plans for SpaceX-supported orbital data centers operating at 100 to 200 gigawatts per year.
January data from Similarweb found that xAI’s Grok chatbot accounted for 3.4% of global generative AI chatbot traffic — a sliver compared to ChatGPT’s 64.5% and Google’s Gemini’s 21.5%.
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