Elon Musk Announces Major Restructuring of xAI Amid Co-Founder Departures and Upcoming SpaceX Merger
Elon Musk announced a significant reorganization of his AI startup, xAI, on February 11. This announcement comes in the wake of the departure of two more co-founders and precedes a potential blockbuster IPO that could value the combined xAI-SpaceX entity at a staggering $1.25 trillion.
During an all-hands meeting on Tuesday night, Musk unveiled that xAI will be restructured into four core divisions:
- Grok’s chatbot and voice product
- Coding
- The Imagine video product
- Macrohard—an AI software company run by digital agents
The restructuring unfortunately resulted in some layoffs, with Musk stating it “required parting ways with some people.”
So far, six of xAI’s 12 founding members have left the company, including co-founders Jimmy Ba and Yuhuai (Tony) Wu, who announced their departures this week. Musk characterized these exits as a necessary part of the company’s evolution, suggesting that some individuals are “better suited for the early stages of a company and less suited for the later stages.”
In the same meeting, Musk also shared his ambitious plans for xAI to build a lunar manufacturing facility. This moon-based factory would produce AI satellites and launch them into space via a giant catapult, aiming to harness more computing power than any rival.
The reorganization comes just days after SpaceX announced plans to acquire xAI ahead of a planned IPO later in 2026. The combined company is set to expand its Colossus data center in Memphis with a new facility. This expansion requires an investment north of $20 billion and between 10,000 to 20,000 Nvidia GB300 systems.
Source: TechCrunch