Musk restructures xAI before to its IPO and following the SpaceX merger

Elon Musk has reorganized the leadership and structure of his artificial intelligence startup xAI as the company prepares for a possible initial public offering (IPO) that could be one of the largest ever. The move comes after xAI was merged with Musk’s rocket company SpaceX and after several senior co-founders recently left the company.

xAI, which is about three years old, originally had 12 co-founders. After the latest resignations — including co-founders Tony Wu and Jimmy Ba — only about half remain. This has raised questions about stability at the company as it tries to compete with major AI players like OpenAI and Google.

In a company-wide meeting, Musk said the reorganization was needed because xAI has grown bigger and now needs a more structured management system. He explained that some people are better suited for early startup stages, while others are better for later, large-scale operations.

Musk said xAI plans to compete across many AI areas, including:

• large language models

• image and video generation

• coding tools

• voice systems

He said the company is actively hiring top AI researchers, even though the work environment is demanding. Musk described the company’s goals as having “interstellar ambitions.”

Executives said one advantage for new hires is access to very large computing power — including a training cluster equal to about 1 million Nvidia H100 GPUs. Musk also mentioned long-term plans to build space-based data centers with SpaceX support, potentially operating at extremely large energy capacity levels.

SpaceX recently announced it would purchase xAI, creating a combined company valued at about $1.25 trillion. The merged company is expected to go public later this year to help fund Musk’s plans, including putting data centers into orbit.

xAI’s chatbot, Grok, is growing but still far behind competitors in global usage. Recent data shows Grok has about 3.4% of generative AI chatbot traffic, compared with roughly 64.5% for ChatGPT and 21.5% for Google Gemini.

The company says it has made fast progress in image and video generation and claims it has produced far more images than some competing tools. However, Grok has also faced criticism from regulators and lawmakers in several countries over generating explicit images.

After the restructuring, xAI is divided into four main teams:

• Aman Madaan will lead Grok’s core model and voice work

• Manuel Kroiss will lead coding models and machine learning infrastructure

• Guodong Zhang will lead the Imagine multimedia team

• Toby Pohlen will run the Macrohard team focused on automating company processes

Coding AI is a major focus area. Musk said Grok Code could become “state of the art” within two to three months. He predicted that AI may soon handle most programming directly, possibly even generating finished software binaries without humans writing code.