Musk restructures xAI into four divisions amid cofounder departures

Thursday 12 - 09:20

By: Dakir Madiha

Musk restructures xAI into four divisions amid cofounder departures

Elon Musk has overhauled the structure of his artificial intelligence company xAI after a wave of departures that has seen half of its original cofounding team exit since its launch in July 2023. The latest resignations, announced within 48 hours of each other, come as Musk prepares to integrate xAI more closely with SpaceX ahead of a major public listing.

Tony Wu and Jimmy Ba, two of the company’s twelve original cofounders, confirmed their departures this week. Wu, who led development of xAI’s foundational models and reasoning capabilities and reported directly to Musk, announced on X that he was stepping down and thanked Musk for what he described as “the adventure of a lifetime.” A day later, Ba said he planned to “recalibrate” his focus.

Their exits follow earlier departures by Igor Babuschkin, Kyle Kosier, Greg Yang and Christian Szegedy, leaving six of the twelve founding members no longer at the company.

During an all-hands meeting on Tuesday evening, later shared publicly on X, Musk acknowledged the changes and outlined a sweeping reorganization. He said xAI had been restructured to increase execution speed and that the shift had required parting ways with some employees.

Reports from the Financial Times indicated that Ba’s decision was influenced by internal tensions within xAI’s technical teams, particularly over mounting pressure to improve the performance of its AI models as Musk seeks to compete with OpenAI and Anthropic. Business Insider reported that Musk had expressed dissatisfaction in recent months with progress on projects including Grok Imagine and Macrohard, and that employees tied to those initiatives had been dismissed.

Under the new structure, xAI will operate through four main product divisions. The first centers on its flagship chatbot Grok and the Grok Voice interface. A second unit, Grok Code, will focus on programming-oriented models. A third, Grok Imagine, will handle multimedia and video generation. The fourth division, Macrohard, is tasked with building AI systems capable of automating office work and modeling entire enterprises.

Cofounder Guodong Zhang will lead the Imagine division, while Toby Pohlen will head Macrohard. Speaking during the company meeting, Pohlen described ambitions that include AI-designed rocket engines, underscoring the scale of the project.

The restructuring comes shortly after SpaceX announced the acquisition of xAI in a deal valuing the combined entity at approximately $1.25 trillion, including about $1 trillion attributed to SpaceX and $250 billion to xAI. The merged company is expected to pursue a public offering later this year in what could become one of the largest initial public offerings on record, potentially raising up to $50 billion.

Musk has portrayed the integrated organization as a vertically aligned innovation engine spanning terrestrial and space-based infrastructure, including plans to deploy AI data centers in orbit using SpaceX’s Starship rockets. Addressing employees, he emphasized speed and acceleration as decisive factors in securing leadership in the AI race.