Following the acquisition of xAI by SpaceX, Elon Musk has initiated a reorganization that has led to the departure of several co-founders and employees, signaling potential changes ahead of a potential initial public offering.
Since the merger in mid-February, xAI has been undergoing internal restructuring to align with SpaceX’s vision.
During an all-hands meeting last month, Musk confirmed the departure of key staff members, including co-founders Tony Wu and Jimmy Ba, resulting in a reduction of the original founding team from 12 members to six.
Reports indicate that frustrations within xAI’s coding division have led to further departures, dwindling the founding team to just two members.
Guodong Zhang, leader of xAI’s Imagine team, announced his departure after Musk held him responsible for coding issues and reassigned his core duties.
Another co-founder, Zihang Dai, also left the company earlier this week.
Executives from SpaceX and Tesla were brought in by Musk to assess xAI’s operations, resulting in the dismissal of underperforming employees.
In a statement, Musk acknowledged past missed opportunities in talent acquisition and mentioned efforts to reintroduce strong candidates into the hiring process.
Recent additions to the xAI team include hires from Cursor, such as Andrew Milich and Jason Ginsberg.
Many talented people over the past few years were declined an offer or even an interview @xAI. My apologies.@BarisAkis and I are going through the company interview history and reaching back out to promising candidates. https://t.co/tvhipa1lu1
— Elon Musk (@elonmusk) March 13, 2026
Tesla-inspired Transformation
Musk highlighted the need for a restructuring at xAI similar to the overhaul that occurred at Tesla.
In 2018, Tesla underwent a significant reorganization to enhance communication and streamline processes amidst financial challenges.
The xAI founder emphasized the necessity for a rebuild from the ground up, citing flaws in the initial construction of the company.
Concerns have been raised by xAI staff regarding the impact of ongoing changes on morale and the company’s ability to reach its full potential.
Researchers have been departing due to the demanding work culture enforced by Musk, while others have been lured by better compensation packages from rival companies.
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