Elon Musk is confronting a significant wave of exits from xAI, the artificial intelligence firm he founded. The recent departures include two additional co-founders this week, which brings the total number of co-founders who have left the company to six out of the original twelve.
During an all-hands meeting on Tuesday night, Musk indicated that these exits were not related to the performance of the individuals but rather about organizational fit as the company grows. “Because we’ve reached a certain scale, we’re organizing the company to be more effective at this scale,” Musk stated, as reported by The New York Times. He emphasized that some individuals excel in the early stages of a company and may not be as well-suited for later growth phases.
On Wednesday, Musk elaborated on his comments via a post on X, clarifying that the departures were not voluntary. “xAI was reorganized a few days ago to improve speed of execution,” he wrote, adding that as the company expands, its structure must evolve. This evolution, Musk acknowledged, necessitated parting ways with certain individuals. He concluded his social media message with an invitation for new talent, humorously referencing “mass drivers on the Moon” as an exciting aspect of the company’s vision.
The loss of half of the founding team in a short timeframe raises questions about organizational health. Musk’s remarks appear aimed at framing the departures as a strategic necessity rather than a crisis, attempting to control the narrative surrounding xAI.
In recent days, at least nine engineers, including two co-founders, have made their departures public. It appears that some of these exits occurred a few weeks prior. Three of the departing staff members have announced plans to establish a new venture in collaboration with other former xAI engineers, though details about this new project remain undisclosed. Others have expressed a desire for greater autonomy and smaller teams to foster innovation in the rapidly evolving AI landscape.
Yuhuai (Tony) Wu, one of the co-founders and reasoning lead, expressed his sentiments in his resignation announcement, stating, “It’s time for my next chapter. It is an era with full possibilities: a small team armed with AIs can move mountains and redefine what’s possible.”
Shayan Salehian, who previously worked on product infrastructure at xAI, also indicated he was leaving to pursue new opportunities, sharing gratitude for his time at xAI and highlighting the intense pace of innovation there.
In light of these departures, the company remains under scrutiny due to ongoing regulatory investigations. This includes a controversy involving the AI model Grok, which reportedly created unauthorized explicit deepfakes that were disseminated on X. French authorities recently conducted a raid on X’s offices as part of their investigation into the matter. In addition, xAI is in the process of preparing for a planned initial public offering (IPO) later this year, following its legal acquisition by SpaceX.
Musk himself is currently facing personal scrutiny due to revelations about his past communications with Jeffrey Epstein, raising further complexities for his public persona amidst the challenges faced by xAI.
Despite the departures, xAI still employs over 1,000 individuals, indicating that the company’s day-to-day operations may not be significantly impacted in the immediate term. However, the rapid succession of departures has prompted online commentary, with some users playfully stating they too were “leaving xAI,” reflecting how the narrative of a “mass exodus” has gained traction on Musk’s platform.
While Musk presents the recent reorganization as a calculated strategy, the fact that multiple engineers have followed the co-founders out the door suggests underlying tensions within the company. In the competitive field of frontier AI, where attracting and retaining key talent is essential, xAI’s future capabilities may be tested as it vies for talent against other prominent firms like OpenAI, Anthropic, and Google.
TechCrunch has reached out to xAI for additional comments regarding the situation.
