Elon Musk confirmed a major shake-up at his artificial intelligence venture, xAI, on Wednesday. The SpaceX CEO posted on X that the company implemented a reorganization to improve “speed of execution.” He admitted this move required parting ways with staff members but did not specify how many people lost their jobs or if any resigned in protest. Despite the cuts, Musk insisted the company is currently “hiring aggressively.”
The announcement caps a turbulent week for the AI firm’s leadership team. Co-founders Jimmy Ba and Tony Wu just announced their exits. They join a growing list of founding members who have already left the building, including Igor Babuschkin, Kyle Kosic, Christian Szegedy, and Greg Yang.
This internal turmoil hits right after a record-breaking financial move. Last week, SpaceX acquired xAI in a massive all-stock deal. Documents reveal the merger values the combined entities astronomically: SpaceX at $1 trillion and xAI at $250 billion. This structure creates a complex web of ownership, as Musk previously used xAI to acquire the social network X in March 2025. Now, the aerospace giant effectively controls the AI developer and the social media platform.
The stakes are incredibly high right now. SpaceX is preparing for a public listing later this year, but legal troubles at xAI could complicate those plans. Government officials in Europe, Asia, and the US are actively investigating the AI company. These probes focus on whether xAI violated safety laws when its chatbot, Grok, allowed users to generate non-consensual explicit images. This deepfake content targeted real people, including minors, drawing severe regulatory scrutiny.
Musk originally launched xAI in 2023 with a team of 11 experts to compete directly with OpenAI and Google. At the time, the website claimed the group wanted to “understand the true nature of the universe.” Three years later, with regulators circling and the original founding team shrinking, the company is fighting to maintain stability while preparing for the stock market.
