"xAI was not built right first time around, so is being rebuilt from the foundations up. Musk said the purpose of the SpaceX acquisition is building orbital data centers, which he has said are the most cost-effective way of producing AI computing power."
"Nine of the original 11 cofounders not named Musk have left the company since 2024. These most recent departures come after an exodus of about a dozen senior engineers. The precipitous loss of talent has stalled the company's biggest AI bet, Macrohard, its effort to build an AI agent capable of doing anything a white collar worker can do."
"Musk has downplayed the brain drain as part of a planned reorganization. Some employees are better suited for the early stage of a venture rather than the later stages, he said at an all-hands meeting last month, according to the New York Times."
Following SpaceX's acquisition of xAI, Elon Musk announced a complete rebuild of the company from its foundations, citing that it was not built correctly initially. The restructuring mirrors a similar process at Tesla. SpaceX's acquisition aims to develop orbital data centers for cost-effective AI computing power. However, xAI faces severe staffing challenges, with nine of eleven original cofounders departing since 2024, along with approximately a dozen senior engineers. The exodus has forced xAI to pause its flagship project, Macrohard, an AI agent designed to perform white-collar work. Musk characterizes the departures as part of planned reorganization, suggesting some employees are better suited for early-stage ventures. The company now seeks aggressive hiring from a limited pool of AI talent.
Read at Fortune
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