Musk announces xAI re-org following co-founder departures, SpaceX merger

SpaceX CEO Elon Musk on Wednesday announced that the company's xAI artificial intelligence venture implemented a reorganization that "required parting ways with some people."The overhaul was done "to improve speed of execution," Musk said in a post on X. He did not say which employees may have been cut as a result of the restructuring or which employees may have resigned of their own volition."We are hiring aggressively," Musk added. Earlier this week, xAI co-founders Jimmy Ba and Tony Wu announced their exits after several other founding members, including Igor Babuschkin, Kyle Kosic, Christian Szegedy and Greg Yang, previously departed.Last week, Musk announced a record-setting, all-stock transaction in which SpaceX, the aerospace and defense juggernaut, acquired xAI, which owns and operates social network X and is the developer of Grok, the embattled AI chatbot and image generator. The deal valued SpaceX at $1 trillion and xAI at $250 billion post merger, according to documents viewed by CNBC. Musk previously used xAI to acquire X, formerly Twitter, in another all-stock transaction announced in March 2025.The co-founder departures and the reorganization this week come as SpaceX prepares to go public sometime this year and while xAI faces regulatory probes in multiple jurisdictions across Europe, Asia and the U.S.The probes are looking into whether xAI violated regional regulations after Grok enabled mass-creation and syndication of non-consensual, explicit images, colloquially known as deepfake porn. The images were based on photos of real people, including children.Musk launched xAI in 2023 alongside 11 other people in an effort to compete against OpenAI and Google. The company's stated goal was to "understand the true nature of the universe," according to its website at the time. WATCH: Calculating Elon Musk's wealth: Here's what to knowGot a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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