Elon Musk restructures xAI after resignation of co-founders — Here's what has changed

Billionaire Elon Musk, on 12 February, said that his artificial intelligence startup xAI, which SpaceX recently acquired, has been reorganised. This comes after two co-founders, Jimmy Ba and Tony Wu, on Wednesday, became the latest from the team's original 12 to resign. The founding team is now down to half its original members, including Elon Musk.

Since the back-to-back resignations, there has been much chatter about xAI's future and speculation about troubles among the leadership.

In a post on X, Musk wrote that the reorganisation was undertaken a “few days ago to improve speed of execution”. He wrote: “As a company grows, especially as quickly as xAI, the structure must evolve just like any living organism. This unfortunately required parting ways with some people. We wish them well in future endeavors.”

The world's richest man also said that the AI startup will continue expanding operations, writing, “We are hiring aggressively. Join xAI if the idea of mass drivers on the Moon appeals to you.”

WATCH: Elon Musk addresses xAI staff

In a post from xAI's official account, the company also shared Musk's over 45-minute address to staff on 11 February. “Since xAI was formed just 30 months ago, the small and talented team has made remarkable progress. The future has never looked more exciting!” Musk said.

“Most of the AI compute is going to be understanding real-time video generation. And we expect to be leaders in that,” he added.

Musk also clarified that he won't be adding ads to Grok while giving updates on the launch of the X Chat app and X Money, which will be available to a limited number of external test users in the coming months, Bloomberg reported. “It’ll be the place where all the money is. It’s going to be a game changer,” he said.

Elon Musk restructures xAI: Here's all we know

• According to Bloomberg, XAI will be organized in four core areas — Grok’s chatbot and voice product; Coding; the Imagine video product; and Macrohard, an AI software company run by digital agents.
• After the departures of Ba and Wu, Aman Madaan has been appointed to lead the main chatbot and voice division.
• Co-founder Manuel Kroiss will lead the coding team.
• While co-founder Guodong Zhang will oversee Imagine video generation and help with coding.
• And co-founder Toby Pohlen will take charge of Macrohard, a division named as a play on Microsoft Corp.

Concerns over xAI — Is there a crisis?

Notably, Ba and Wu are the fifth and sixth from the founding group to resign from the company over the past two years. They shared their decision in brief individual posts on X, which did not hint at an acrimonious exit.

However, the developments follow a spate of exits by other co-founders over the past two years, which has dwindled the company's original team of 12 co-founders down to six, amid reports of a financial crunch and discord over direction, reports say.

First to leave was Kyle Kosic in 2024 (just a year after xAI was founded in 2023), followed by Igor Babuschkin and Christian Szegedy in 2025, as per another Bloomberg report. In January, co-founder Greg Yang also said he would take a step back after being diagnosed with Lyme disease.

The Financial Times has reported internal tensions at xAI's technical team over demands to improve its AI model performance as Elon Musk seeks to catch up with Anthropic and OpenAI.

There is also concern that xAI's merger with SpaceX could lead to a funding crunch as it burns cash on data centres, computing and talent, the Bloomberg report added.

A CNBC report also highlighted multiple regulatory challenges facing the firm in Asia, Europe and the US over its chatbot Grok AI's image-generating feature, which landed in hot water after mass creating non-consensual and explicit images, i.e. deepfake porn, of real people, including children.

(With inputs from Bloomberg)