Elon Musk’s AI startup, xAI (PC:XAIIQ), is facing a wave of senior departures. Several executives have left the company after raising concerns about its management and financial outlook.
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Among those who left are Linda Yaccarino, who was the chief executive of X; Mike Liberatore, who served as chief financial officer; Igor Babuschkin, a co-founder and researcher; and Robert Keele, who was general counsel. Their exits come as xAI ramps up spending on data centers and chips while competing with larger rivals such as OpenAI and Anthropic.
Investors, Finances, and the Role of Valor Equity Partners
Day-to-day operations are managed by Jared Birchall and John Hering, who work closely with Musk. Some former executives said there was no clear chain of command. Others questioned the role of Musk’s family office, Excession, in handling xAI’s money. Musk’s lawyer said the finances are audited by PricewaterhouseCoopers and rejected claims of problems.
Despite the internal issues, xAI has raised more than $15 billion since its launch two years ago. The company built a large data center in Memphis and is working on a second site that will host about 550,000 Nvidia (NVDA) Blackwell chips. However, a $5 billion debt deal set limits on how much more the startup can borrow. To help fund growth, xAI has drawn on other Musk ventures such as SpaceX, which invested $2 billion.
Antonio Gracias, the head of Valor Equity Partners, has become more active in supporting the company. Valor was an early backer of Tesla (TSLA) and remains one of Musk’s closest partners. Gracias has stepped into other Musk-linked projects in the past, including Tesla production challenges and the Twitter acquisition. Now, Valor is playing a bigger role at xAI after the departures. The firm stated that it is seeing strong progress across research, infrastructure, and fundraising.
Forward-Looking
Musk merged xAI with X in March, which valued the combined group at $113 billion. The integration also gave X users access to Grok, xAI’s chatbot. Yet Grok faced criticism after sharing violent and antisemitic responses online, which led the company to issue an apology.
Looking ahead, xAI will likely keep spending heavily on computing power to compete with larger peers. Tesla shareholders are set to vote in November on whether Tesla will invest more money in xAI. Musk has said he would welcome such a move.
Is TSLA Stock a Buy, Hold, or Sell?
Turning our attention to Elon Musk’s only publicly traded company, Tesla, which is still considered a Hold based on 35 ratings assigned by analysts in the last three months. The average price target for TSLA stock is $313.17, implying a 26.46% downside from the current price.
