New updates have been reported about xAI.
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xAI is undergoing a sweeping rebuild as Elon Musk replaces much of the founding technical team to sharpen the company’s competitive position against Anthropic and OpenAI, with only two of the original 11 co-founders still in place. Musk has acknowledged that xAI “was not built right first time around” and is restructuring the deep learning lab from the ground up after criticizing its AI coding tools for lagging behind rival products like Claude Code and Codex, a shortfall that threatens a key revenue line for the business.
The overhaul has triggered departures of senior engineers and co-founders in recent weeks, while executives from Musk’s other companies have been brought in to review staff and remove underperformers, even as xAI continues targeted hiring, including product engineering leaders from AI code-assistant startup Cursor to shore up its software development capabilities. Strategically, xAI is also pausing and reconfiguring its ambitious Macrohard project — a joint initiative with Tesla to build a white-collar AI agent integrated with Tesla’s “Digital Optimus” — as the unit, now housed within SpaceX and burning cash, faces mounting pressure to prove commercial traction for its Grok model and related agent products ahead of a potential SpaceX share offering.