Elon Musk Explains xAI Restructuring After Founding Team Departures

Elon Musk has publicly addressed the recent wave of departures at his artificial intelligence startup, xAI, describing them as part of a broader restructuring effort following the company’s merger with SpaceX.

The comments come after two founding members, Jimmy Ba and Tony Wu, announced their exits this week. Their departure adds to a growing list of high-profile exits at the company. Since xAI’s launch in May 2023, six of its twelve founding team members have left, with five stepping away over the past year.

Speaking during an all-hands meeting on Tuesday night, Musk acknowledged the changes and framed them as a natural evolution for a rapidly scaling company. As quoted by a famous publication, Musk said, “Because we’ve reached a certain scale, we’re organising the company to be more effective at this scale.”

The tech billionaire suggested that some of the individuals who departed were particularly well-suited to the startup’s early phase but not necessarily its next chapter. He explained, “And actually, when this happens, there’s some people who are better suited for the early stages of a company and less suited for the later stages.”

xAI was recently merged with SpaceX in a move that signals Musk’s ambition to integrate artificial intelligence more deeply into his broader technological ecosystem. Reports indicate that Musk is considering taking the combined entity public before the end of the year, a step that could mark one of the most closely watched public offerings in the tech sector.

Following the merger, CNBC reported that the combined valuation of xAI has reached approximately $250 billion. The startup is best known for developing the Grok chatbot and advanced AI models. It also operates the social media platform X, further expanding its footprint in both AI and digital communications.

In a post on X, Musk reinforced his message that the restructuring was aimed at increasing operational efficiency. He stated that xAI had been overhauled “to improve speed of execution” and emphasised the need for adaptability in fast-growing organisations. “As a company grows, especially as quickly as xAI, the structure must evolve just like any living organism,” Musk wrote.

He acknowledged that such organisational shifts can be difficult. “This unfortunately required parting ways with some people,” Musk added.

Despite the leadership changes, Musk made it clear that xAI’s ambitions remain undiminished. In fact, he indicated that the company is preparing for an aggressive hiring phase. The focus, he suggested, will be on advancing ambitious projects, including the development of data centres in space.

“We are hiring aggressively. Join xAI if the idea of mass drivers on the Moon appeals to you,” Musk said, underscoring the company’s continued push toward futuristic and large-scale technological initiatives.

While the exits of several founding members may raise questions about internal stability, Musk’s message is clear: xAI is entering a new phase—leaner, restructured, and aiming to move faster as it scales alongside SpaceX