Every co-founder hired to build XAI, Elon Musk, has reportedly left the company. Manuel Kroiss, who heads the preparation team, told people this month. According to Business Insider’s Ross Nordeen, Musk’s “right operator“Departed Friday. They were the last two of eleven co-founders to leave the company, which was valued at $250 billion when SpaceX bought it in February, and which Musk himself described two weeks ago.not set up correctly the first time.”
Exits are no ordinary start-up loss. The researchers Musk recruited in 2023 were among the most accomplished in the field of artificial intelligence. Jimmy Ba co-authored the 2014 paper on Adam’s optimization, the most cited paper in artificial intelligence with over 95,000 citations. Igor Babuschkin, Senior Engineer, came from Google DeepMind. Christian Szegedy came from Google. Tony Wu led the reasoning team. Greg Yang, Toby Pohlen, Zihang Dai, Guodong Zhang, and Kyle Kosic brought expertise from DeepMind, Google, Microsoft, and OpenAI. That entire cohort is now gone, and the company they helped build is, in Musk’s words, “being rebuilt from the ground up.”
Opening schedule
Muhajir accelerated sharply in early 2026. Christian Szegedi left in February 2025, which is an early signal. But the cascade began in earnest after Tony Wu, one of the most operative central co-founders, announced his departure on February 10, 2026. Jimmy Ba resigned within 24 hours amid tensions over demands to improve the model’s performance. By mid-March only Kroiss and Nordeen remained. Their departures this week complete the sweep.
It’s hard to separate the timing from the corporate restructuring happening around xAI. On February 2, SpaceX acquired xAI in an all-stock deal that valued SpaceX at $1 trillion and xAI at $250 billion, creating a combined entity valued at $1.25 trillion, the largest corporate merger in history by valuation. The deal brought together xAI, X (formerly Twitter) and SpaceX under a single corporate umbrella, with SpaceX now preparing for a potential IPO that could target a mid-2026 valuation of $1.75 trillion.
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A few weeks ago, in January, Tesla invested $2 billion in xAI’s Series E round at a value of about $230 billion. Tesla shareholders are suing Musk for breach of fiduciary duty over the investment, alleging that the company’s CEO effectively diverted equity capital into his private venture. On March 13, Musk publicly admitted that xAI’s products, specifically its coding tools, were not of this type. Competing with Anthropic’s Claude Code or OpenAI’s Codex. Tesla has invested $2 billion in a company whose founder admits it needs to be rebuilt from the ground up.
“Not built right” means $250 billion
Musk’s admission on March 13 was unusually candid for a CEO whose company had just been acquired for a quarter of a trillion dollars. He said that xAI’s AI coding tools simply didn’t work and that the underlying system needed to be rebuilt. The statement confirmed the co-founders’ decision to leave: if the company’s own management admits the product is a failure, the researchers who built it have limited incentive to stay to rebuild, especially if they can provide extraordinary compensation to competitors.
The AI talent market in 2026 is the most competitive ever. Meta is reportedly offering packages worth $300 million for four years to retain top AI researchers. OpenAI, Google DeepMind, and Anthropic are all aggressively expanding their research teams. The eleven researchers leaving XAI represent a concentration of talent that any of these companies would pay dearly to acquire. Where they go will say as much about the future direction of the industry as it does about xAI’s past.
xAI is not inactive. Built with more than 200,000 NVIDIA H100 GPUs, the Colossus supercomputer remains one of the world’s largest AI training clusters. Grok, the company’s chatbot, has a distribution channel through X’s user base. And the SpaceX merger provides access to capital, infrastructure and engineering talent on a scale that few AI companies can match. The question is, is infrastructure and distribution sufficient when the research leadership that makes a product competitive is completely abandoned?
An example
The xAI co-founder’s exit follows a recurring pattern at Musk’s companies. Twitter has lost most of its senior management and about 80 percent of the workforce Within months of acquisition in 2022. Tesla’s senior ranks have steadily dwindled as Musk’s focus has been divided between six companies. A common thread is a management style that produces extraordinary results in hardware engineering, where Musk’s tolerance for risk and pace of iteration have made SpaceX and Tesla industry-defining companies, but seem less effective in research-based fields where the most valuable people have abundant alternatives and a low tolerance for volatility.
Artificial intelligence research is the most competitive tech job market in 2026. The researchers who co-founded xAI didn’t need to be there. They chose to be attracted by the resources Musk could deploy and the ambitions of the project. The fact that they each chose to leave at a time when the company is valued at $250 billion and has access to SpaceX’s resources suggests that the problems at xAI are not primarily financial or infrastructural. They are organizational in nature. Once the people who created the research culture are gone, no amount of capital can restore it.
