In three years since its inception, only two of the original 11 xAI co-founders remain alongside Elon Musk as the firm undergoes a personnel overhaul to compete with Anthropic and OpenAI. Musk claims this transformation is intentional, stating on X that xAI is being rebuilt from the ground up after not being constructed properly initially. This week, the departure of co-founders Zihang Dai and Guodong Zhang highlights the competitive pressure, as xAI struggles to match programming tools like Anthropic’s Claude Code or OpenAI’s Codex. Revenue hinges on effective coding tools, thus xAI’s lag represents a significant business challenge.
Musk’s reorganization involved 11 senior engineers exiting the company last month, prompting SpaceX and Tesla execs to step in, assess, and potentially dismiss underperforming staff. Remaining co-founders, Manuel Kroiss and Ross Nordeen, face a challenging task.
Musk and Baris Akis are reviewing previously rejected job applications to identify potential recruits, acknowledging past oversight. xAI’s staffing includes over 5,000 employees, contrasted with OpenAI’s 7,500 and Anthropic’s 4,700. Adding Andrew Milich and Jason Ginsberg from Cursor highlights xAI’s appeal, particularly its internal AI resources.
As part of SpaceX, xAI must prove its worth in light of anticipated public stock offerings. Beyond coding tools, Musk eyes xAI’s larger vision with its Macrohard project, aimed at developing a versatile AI agent. Despite leadership changes and the project’s pause, Musk announced a joint effort with Tesla through the Digital Optimus initiative. This aims to mirror the functionality seen in applications like Perplexity’s “Everything is Computer” and ventures by OpenAI’s Peter Steinberger.