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All Original Co-Founders Depart xAI Amid Company Restructuring and SpaceX IPO Preparations

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All Original Co-Founders Depart Elon Musk’s xAI Amid Restructuring

All 11 original co-founders of Elon Musk's artificial intelligence startup, xAI, have now departed the company. This follows a series of exits over a three-month period, culminating with the departures of Manuel Kroiss and Ross Nordeen. The changes occur as xAI undergoes a corporate restructuring following its acquisition by SpaceX, which is preparing for an initial public offering.

Timeline of Co-Founder Departures

The departure of co-founders from xAI accelerated in early 2025.

  • January: Co-founder Greg Yang departed.
  • February: Co-founders Tony Wu and Jimmy Ba departed.
  • March: Co-founders Toby Pohlen, Zihang Dai, Guodong Zhang, and Manuel Kroiss departed.
  • Recent Days: Ross Nordeen, the final non-Musk co-founder, departed.

Nordeen, who joined xAI in 2023 from Tesla's Autopilot team, reported directly to Elon Musk and was involved in coordinating company priorities. Following his departure, he posted a photo online with the caption "Touching some grass."

Company Restructuring and Leadership Statements

The departures coincide with a corporate reorganization. In February, SpaceX acquired xAI, integrating it with SpaceX and X (formerly Twitter) under a unified structure.

Elon Musk has publicly stated that xAI "was not built right the first time around" and is "being rebuilt from the foundations up." Michael Nicolls, SpaceX executive and xAI's president, stated earlier this month that the company is "clearly behind" its competitors and needs to take action.

Internal Projects and Market Position

Internally, xAI has reportedly reduced staff on its Grok Imagine (image/video generation) and Macrohard (coding tools) teams. The Macrohard project has reportedly stalled and is now described as a joint effort with Tesla. Engineers from Tesla and SpaceX have been integrated to assist with xAI's projects.

xAI is positioned in a highly competitive AI market. The company has a reported valuation of approximately $250 billion but is noted to trail major competitors like OpenAI and Anthropic in terms of scale, consumer adoption, and visibility. Elon Musk helped found OpenAI in 2015 and is currently involved in litigation against the company.

SpaceX IPO Context and Expert Commentary

SpaceX confidentially filed for an IPO with the Securities and Exchange Commission. Reports suggest a potential valuation of $1.5 trillion or higher for the aerospace company.

Corporate governance and financial experts provided analysis on the co-founder departures in the context of the upcoming IPO:

  • Charles Elson, a corporate governance expert, stated that mass departures of a founding leadership team typically signal a negative outlook, potentially indicating a belief the company is overvalued or a lack of confidence in future management.
  • Franco Granda, a senior research analyst at PitchBook, noted that companies face increased scrutiny before an IPO. He suggested that integrating xAI, which some reports describe as having significant financial expenditures, adds risk and distraction to SpaceX's debut.
  • Paul Nary, a mergers and acquisitions expert, emphasized that AI talent is among a company's most valuable assets, and firms typically endeavor to retain such talent before an IPO. He also noted that Musk's companies often operate outside conventional corporate norms.

Recent Business Developments

Amid the restructuring, xAI has explored other business partnerships. The company has held discussions with French AI startup Mistral and AI coding startup Cursor about a potential three-way partnership. SpaceX announced a deal giving it an option to buy Cursor for $60 billion. Mistral co-founder Devendra Chaplot joined xAI last month and currently leads pretraining there.