Elon Musk Addresses xAI Exodus, Announces Reorganization: 'Unfortunately Required Parting Ways With Some People'

On Wednesday, Elon Musk said that his artificial intelligence company xAI has undergone a restructuring following a wave of co-founder departures.

xAI Restructuring Follows Leadership Departures

Musk took to X and said that the reorganization was designed "to improve speed of execution" and confirmed that the changes "required parting ways with some people."

He did not specify how many employees were affected or whether the exits were voluntary.

"We are hiring aggressively," Musk added, signaling that the company plans to rebuild even as it reshapes its structure.

The announcement comes days after xAI co-founders Jimmy Ba and Tony Wu disclosed their departures. Their exits follow those of other founding members, including Igor Babuschkin, Kyle Kosic, Christian Szegedy and Greg Yang, who had left earlier.

xAI, founded in 2023, was launched to compete with OpenAI and Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google in the fast-growing AI race.

SpaceX-xAI Deal Reshapes Musk's Tech Empire

The shake-up follows an all-stock transaction in which SpaceX acquired xAI. The deal reportedly values SpaceX at $1 trillion and xAI at $250 billion after the merger.

xAI owns social media platform X and develops Grok, the company's AI chatbot and image generator. Last year, Musk used xAI in another all-stock deal to acquire X.

Regulatory Scrutiny Over Grok Deepfake Concerns

The restructuring also comes as xAI faces regulatory probes in the U.S., Europe and parts of Asia.

Authorities are examining whether Grok enabled the creation and distribution of non-consensual explicit deepfake images, including content allegedly involving minors.

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