Musk announces xAI re-org following co-founder departures, SpaceX merger

Elon Musk, the CEO of SpaceX, revealed on Wednesday that his artificial intelligence initiative, xAI, has undergone a significant reorganization, which involved some personnel changes. Musk emphasized that this restructuring was essential to enhance operational efficiency, although he did not specify which employees were affected by the changes or if any had chosen to resign voluntarily. In a post on the social media platform X, Musk assured followers that xAI is on a hiring spree, aiming to expand its workforce. This announcement follows the recent exits of co-founders Jimmy Ba and Tony Wu, who left after a series of departures among the founding team, including notable figures like Igor Babuschkin, Kyle Kosic, Christian Szegedy, and Greg Yang. The timing of this overhaul coincides with a landmark acquisition where SpaceX has absorbed xAI in an all-stock deal that has set the company's valuation at an impressive $1 trillion, while xAI is now valued at $250 billion post-merger, as reported by CNBC. This merger is not xAI's first encounter with SpaceX; Musk previously utilized xAI to acquire the social media platform X, formerly known as Twitter, in March 2025. The recent leadership shake-up and reorganization occur as SpaceX prepares for a public offering later this year. Meanwhile, xAI is currently facing regulatory scrutiny in various regions, including Europe, Asia, and the United States. Authorities are investigating potential violations linked to Grok, the AI chatbot developed by xAI, particularly regarding the generation and distribution of non-consensual explicit images, often referred to as deepfake pornography, which have raised significant ethical concerns. Musk founded xAI in 2023 with a team of 11 individuals, aiming to rival giants like OpenAI and Google, with the ambitious goal of deciphering the universe's fundamental nature according to its early mission statement.