Elon Musk says xAI must be 'rebuilt' as co

Less than six weeks afterElon MuskmergedSpaceXandxAIin a deal he valued at $1.25 trillion, the world's richest person isacknowledgingthat hisartificial intelligencestartup "was not built right first time around, so is being rebuilt from the foundations up."
Musk took to X, which is now owned by SpaceX, to make the comment after a number of xAI's co-founders recently hit the exits.

The most recent came this week, when Zihang Dai and Guodong Zhangreportedlyleft the company.

Last month, influential researcher Jimmy Baannouncedhis departure in aposton X, thanking Musk and writing that he was, "Grateful to have helped cofound at the start." That came after Tony Wusaidhe was leaving.

Toby Pohlen followed themout the doorlater in February.

The xAI exodus, which leaves Musk with only a pair of people who started the company with him in 2023, comes as SpaceX prepares togo publicsometime this year in what will likely be a record IPO, should it take place.

In merging SpaceX with xAI last month, the reusable rocket company was valued at $1 trillion and the AI part of the business was tagged at $250 billion, according todocuments viewedby CNBC.

Musk previously used xAI to acquire his social network X, formerly Twitter, in another all-stock transaction announced last March.

On Thursday, SpaceX said it hired two programmers from red-hot AI coding startupCursor, Andrew Milich and Jason Ginsberg.

TheFinancial Timesreported on Friday, citing people familiar with the matter, that Musk has ordered a round of job cuts after seeing the rapid success of coding tools from generative AI rivalsOpenAIandAnthropic.

"Many talented people over the past few years were declined an offer or even an interview @xAI," Muskwrote on Xearly Friday.

"My apologies."
Musk added that he and Baris Akis, who is responsible for engineering talent at xAI, "are going through the company interview history and reaching back out to promising candidates."
In addition to losing early talent and falling behind in AI-powered coding, xAI faces a number of controversies surrounding its chatbot and image generator Grok, which is the subject of governmentinvestigationsin multiple international jurisdictions.

The problems began after Grok enabled users to easily generate non-consensual sexual images, ordeepfake porn, by modifying photos or videos of real adults and children.

Under the Trump presidency, xAI's Grok has wongovernment contractsfrom the Defense Department andGeneral Services Administration.

Meanwhile, xAI has been spending billions of dollars to stand up power and data infrastructure in and around Memphis, Tennessee, in recent years.

The company justscoreda permit in the state of Mississippi to set up one of the largest power plants in the region to use natural gas-burning turbines for xAI's data centers.

Tesla, the automaker that Musk counts on for substantially all of his liquid wealth, is working with xAI in a number of ways.

The EV maker is integrating Grok into its vehicle infotainment and navigation systems and using Grok models in conjunction with the development of Optimus humanoid robots.

Tesla has also sold hundreds of millions of dollars worth of itsbig backup batteriesto xAI for use at its data centers.

Musk and xAI didn't immediately respond to requests for comment.

WATCH:Why Elon Musk is pivoting Tesla
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