And then there were two: Of the original 11 co-founders who kickstarted xAI with Elon Musk three years ago, only two remain as the deep learning lab continues a personnel overhaul to compete with Anthropic and OpenAI. That rebuilding, insists Musk, is by design.
“xAI was not built right first time around, so is being rebuilt from the foundations up,” Musk said Thursday on his social media platform, X. By most measures, it isn’t going all that smoothly.
The most immediate pressure is competitive. This week, xAI co-founders Zihang Dai and Guodong Zhang left the outfit after Musk complained that the company’s AI coding tools were not effectively competing with Claude Code or Codex, rival programming assistants made by Anthropic and OpenAI, respectively. Musk said the company held an all-hands meeting on Wednesday that focused on how to catch up, which he predicted would be possible by the middle of this year.
Coding tools matter so much because they’re where the money is. While an early-year surge of users was powered by xAI’s lax regulation of Grok’s ability to produce sexual and even abusive imagery, coding tools are seen as the key revenue-generating tech for AI labs. That makes xAI’s current lag in this area more than a perception issue; it’s a business problem.
The personnel overhaul extends well beyond this week. A month ago, 11 senior engineers at xAI, including two co-founders, left the company following changes Musk described as a reorganization to suit a larger business. That effort was apparently insufficient: The Financial Times reported that SpaceX and Tesla executives have parachuted into the company to evaluate employees and fire those who don’t make the grade.
The two remaining co-founders, Manuel Kroiss and Ross Nordeen, along with Musk, have their work cut out for them.
Musk is now casting a wider net for talent. On Thursday, h …