Elon Musk has admitted that all has not been well at xAI.
In a candid post on X, Musk acknowledged that his AI venture was not built correctly from the outset and is now being rebuilt from the foundations up — drawing a direct parallel to the early struggles of Tesla, which underwent a similar process before becoming the most valuable automaker in the world. The admission comes at a turbulent moment for xAI, with half of its original founding team having now departed the company.
“xAI was not built right first time around, so is being rebuilt from the foundations up. Same thing happened with Tesla,” he said.
Half the Founding Team Gone
xAI co-founder Jimmy Ba became the sixth of the company’s twelve original co-founders to leave, in a string of departures that has raised eyebrows across the AI industry. Ba’s exit followed swiftly on the heels of Yuhuai (Tony) Wu’s resignation, with Greg Yang having stepped aside three weeks earlier citing health issues following a Lupus diagnosis.
Ba, who signed off warmly on X, expressed pride in what the xAI team had achieved and hinted at the scale of change underway in the broader AI landscape. “We are heading to an age of 100x productivity with the right tools,” he wrote, suggesting that the pace of AI development itself had prompted him to recalibrate his focus on the bigger picture.
His departure was particularly notable given his standing in the field. Ba co-authored the Adam optimizer — the algorithm that trains virtually every large language model in existence — and co-invented Layer Normalization, a foundational component inside every transformer architecture including xAI’s own Grok model. He completed his PhD under AI pioneer Geoffrey Hinton and has accumulated over 300,000 academic citations.
The full list of departures now includes Igor Babuschkin, who left in August 2025 to launch Babuschkin Ventures, a venture capital firm focused on safe AI development; Kyle Kosic, who departed in 2024 to join rival OpenAI; Christian Szegedy, who also left in 2024 for Morph Labs; Greg Yang, who departed citing a Lupus diagnosis; Tony Wu; Jimmy Ba; and Toby Pohlen.
A Broader Industry Pattern
Co-founder attrition is not unique to xAI. The AI industry has become defined by it. OpenAI has seen eight of its eleven original co-founders depart, including Elon Musk himself, Ilya Sutskever (who went on to found Safe Superintelligence Inc.), John Schulman (now at Thinking Machines), and Durk Kingma (now at Anthropic). Thinking Machines, co-founded by former OpenAI CEO Mira Murati, has already lost three of its six co-founders. Even Safe Superintelligence Inc., barely a year old, saw co-founder Daniel Gross depart for Meta in 2025. Google DeepMind experienced its own high-profile loss when Mustafa Suleiman left to lead AI efforts at Microsoft.
Against this backdrop, Anthropic stands as a notable exception — the only major AI laboratory to have retained its entire founding team. All seven co-founders who established the company in 2021, including CEO Dario Amodei and President Daniela Amodei, remain at the organisation.
The Tesla Parallel
Musk’s comparison to Tesla is could be valid. The electric vehicle company went through years of internal turbulence, near-bankruptcy, and fundamental operational overhauls before finding its footing and eventually becoming the world’s most valuable automaker. If the Tesla analogy holds, Musk appears to be signalling that xAI’s current disruption is a feature of the rebuilding process, not a sign of terminal decline.
xAI has demonstrated formidable capabilities in its short existence. Nvidia CEO Jensen Huang noted that xAI assembled a data centre in just 19 days — a process that typically takes competitors up to a year — calling the feat “superhuman.” The company’s Grok model has shown competitive performance against leading models from OpenAI and Google, and its Colossus supercomputer, powered by 100,000 Nvidia GPUs, remains one of the most powerful AI training systems on the planet.
Turbulence Beyond Departures
The co-founder exits are not the only challenge xAI has had to navigate. The company launched a wide-ranging lawsuit against OpenAI alleging a systematic campaign to steal its trade secrets, including claims that a former engineer uploaded xAI’s entire codebase before defecting to the rival firm, and that a former CFO removed proprietary data centre strategies. OpenAI has denied the allegations and got a favourable ruling from the courts.
Even among remaining staff, the cultural picture is complex. One engineer who departed voluntarily complained that all AI labs, including xAI, were building the same thing and expressed a desire for more creativity in the field — a sentiment that reflects a wider tension in an industry moving at extraordinary speed toward a common destination.
Whether Musk’s rebuilding effort will shore up xAI’s foundations as effectively as Tesla’s turnaround remains the central question. What is clear is that xAI, founded only in 2023, is being stress-tested at a pace that would challenge any organisation — and that its founder is, at least, not pretending otherwise.