Eight xAI cofounders have left since January. Musk says he's rebuilding from scratch.
Elon Musk's AI startup xAI has lost eight cofounders this year, including Manuel Kroiss, Ross Nordeen, Guodong Zhang, Zihang Dai, Toby Pohlen, Jimmy Ba, Tony Wu, and Greg Yang. Most departures began after SpaceX merged with xAI ahead of a planned initial public offering.
Musk acknowledged the instability directly. "xAI was not built right first time around, so is being rebuilt from the foundations up," he said in a post last month. "Same thing happened with Tesla."
What triggered the exits
The reasons run deeper than typical restructuring friction. Zhang, who led xAI's image generation team, stepped down after Musk held him responsible for problems in the coding product and removed him from his main role, according to reporting from the Financial Times.
Ba's departure followed internal pressure to rapidly improve AI model performance. Some researchers left due to exhaustion from what Musk calls an "extremely hardcore" work culture. Others received more attractive offers from competitors.
Former employees described xAI as stuck in a perpetual "catch-up phase," constantly following what OpenAI had shipped a year earlier rather than pursuing new territory. One person told The Verge: "Trying to do what OpenAI was doing a year ago is not how you beat OpenAI."
Safety concerns also surfaced repeatedly. Former employees claimed xAI has no functioning safety team. The organizational chart Musk shared after restructuring included no dedicated safety function.
Musk's response: hire differently and move faster
Rather than pause, Musk is accelerating. He said he is reviewing old resumes and apologizing to candidates he previously rejected. "Many talented people over the past few years were declined an offer or even an interview @xAI. My apologies," he posted on X.
He hired two high-profile executives: Jason Ginsberg and Andrew Milich, who helped scale Cursor from zero to $2 billion in annual recurring revenue. Both will work on coding products, an area where Musk acknowledged Grok is currently behind.
The competitive gap remains significant
xAI still trails OpenAI and Anthropic in adoption and product maturity. Last month, Bloomberg reported that xAI is sending engineers directly into corporate client offices to win business from those competitors.
Musk is confident the gap will close. "xAI will catch up this year and then exceed them all by such a long distance in 3 years that you will need the James Webb telescope to see who is in second place," he said.
For product teams, the xAI situation illustrates a core tension: aggressive hiring and performance pressure can accelerate development, but it also drives away experienced talent. The company's ability to retain institutional knowledge while rebuilding will determine whether it can actually narrow the gap with entrenched competitors before going public.
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