Elon Musk officially confirmed a total “reboot” of xAI following a massive leadership exodus. Of the 12 original co-founders who launched the startup in 2023, only two remain alongside Musk: Manuel Kroiss and Ross Nordeen.
This week, the departures of Zihang Dai and Guodong Zhang (who led the “Imagine” video and “Grok Code” teams) marked the final stage of what industry analysts are calling the “X-odus.”
The Current State of the “Original 12”
The founding team, which was a “who’s who” of top-tier talent from OpenAI, DeepMind, and Google, has almost entirely dissolved as the company merges into SpaceX.
| Status | Co-Founders |
| Active | Elon Musk, Manuel Kroiss, Ross Nordeen |
| Resigned (March 2026) | Zihang Dai, Guodong Zhang |
| Resigned (Jan–Feb 2026) | Jimmy Ba, Tony Wu, Toby Pohlen, Greg Yang (Health/Lyme) |
| Resigned (2024–2025) | Igor Babuschkin, Christian Szegedy, Kyle Kosic |
Musk’s “Not Built Right” Admission
In a series of candid posts on X, Musk admitted that xAI “was not built right the first time around” and is being rebuilt “from the foundations up.”
- The Coding Crisis: Musk expressed public frustration that Grok has fallen behind competitors like Anthropic’s Claude Code and OpenAI’s Codex. He reportedly blamed the departing founders for the “inadequate performance” of the coding division.
- The SpaceX Audit: Following the recent $1.25 trillion merger of xAI and SpaceX, Musk brought in “fixers” and auditors from SpaceX and Tesla to review xAI’s operations. This led to a wave of terminations for employees deemed “not hardcore enough.”
- “Macrohard” Merger: The ambitious Macrohard project (designed to compete with Microsoft using AI agents) has been scaled back and merged with Tesla’s Optimus robot software efforts.
The Rebuild: Poaching and Apologies
To fill the talent void, Musk has adopted a two-pronged “reboot” strategy:
- Poaching Cursor Leaders: xAI has already hired two senior engineering leaders from Cursor, the viral AI coding startup, to lead the ground-up rebuild of Grok’s coding capabilities.
- The “Rejected Talent” Outreach: In a rare move, Musk publicly apologized to “many talented people” who were previously rejected or ghosted by xAI’s hiring team. He and Head of Talent Baris Akis are now manually reviewing old applications to bring in new “builders.”
What’s at Stake?
This internal turmoil comes at a high-pressure moment:
- Trillion-Dollar IPO: SpaceX/xAI is reportedly preparing for a record-breaking IPO as early as June 2026.
- Burn Rate: xAI is currently burning through approximately $1 billion per month in compute and data center costs.
- Competition: With Claude 4.6 and GPT-5.4 dominating the market, Musk has set a “do-or-die” goal for xAI to leapfrog its rivals by July 2026.
