Mikkel Christensen
Elon Musk now openly acknowledges that his AI company had a flawed start. Shortly after a major acquisition, the company is undergoing a comprehensive rebuild.
Elon Musk now openly acknowledges that his AI company had a flawed start. Shortly after a major acquisition, the company is undergoing a comprehensive rebuild.
At the same time, the firm is struggling to retain key employees and advance core projects.
Internal crisis
Elon Musk stated that xAI is being rebuilt from the ground up. In a post on X, he wrote: “xAI was not built right first time around, so is being rebuilt from the foundations up,” according to Fortune.
The statement comes shortly after SpaceX acquired the company in a high-profile deal.
Musk compares the process to earlier changes at Tesla.
Employees leaving
According to Fortune, xAI has seen a significant departure of key personnel.
Nine out of 11 original co-founders, excluding Musk himself, have left the company since 2024.
Several of the most recent departures include both co-founders and experienced engineers.
Project paused
The internal turmoil has affected the company’s flagship initiative.
The project “Macrohard,” which aimed to develop an AI with capabilities comparable to office workers, has been put on hold.
This happened shortly after project lead Toby Pohlen left the company, Fortune reports.
New plans
Musk is now attempting to build a new team.
The company is actively recruiting AI specialists, while previously rejected applications are being reviewed again.
This is taking place in a market where competition for talent is intense.
Future and strategy
One goal of the acquisition is to develop so-called “orbital data centers,” intended to provide cheaper computing power for AI.
Musk has also downplayed the employee departures, describing them as part of a restructuring.
He also acknowledged mistakes in recruitment: “Many talented people over the past few years were declined an offer or even an interview @xAI. My apologies.”
Sources: Fortune
