Six of xAI’s twelve co-founders have departed, including key figures from its reasoning and research teams, just as the AI startup eyes an IPO and a SpaceX merger. These exits, coupled with other researchers leaving, highlight internal pressures and missed technical milestones, raising concerns amid increased scrutiny.

Six of the 12 co-founders who launched Elon Musk‘s AI venture xAI in 2023 have now left the company, with two departures hitting back to back this week just as the startup faces an IPO and a mega-merger with SpaceX.Yuhuai (Tony) Wu, who led xAI’s reasoning team, broke the news Monday night in a post on X. “It’s time for my next chapter,” Wu wrote. “It is an era with full possibilities: a small team armed with AIs can move mountains and redefine what’s possible.”Less than 24 hours later, Jimmy Ba, who oversaw research, safety and enterprise efforts and reported directly to Musk, confirmed he was out too. Ba thanked Musk and said he would “continue to stay close as a friend of the team.”

Five of the six co-founder departures have come in the last year alone

The exits didn’t start this week. Infrastructure lead Kyle Kosic left for OpenAI in mid-2024. Google veteran Christian Szegedy followed in February 2025. Igor Babuschkin departed last August to start a venture firm, and Greg Yang left just last month, citing health issues.And it’s not just co-founders. More than half a dozen other researchers have also quietly walked out in recent weeks, according to the Financial Times, thinning out xAI’s already small technical team.

Staff say xAI leadership overpromised Musk on technical milestones

Musk held a call with employees on Tuesday to discuss changes in technical leadership, one person familiar with the matter told the FT. Some staff have complained that xAI’s leaders set unrealistic expectations with Musk on model development, creating pressure that proved hard to live with.The company’s coding project MacroHard, meant to rival OpenAI’s Codex and Anthropic’s Claude Code, has reportedly fallen short of Musk’s ambitions. Its AI companions product, including an anime character called Ani that can hold erotic conversations, has also missed engagement targets.

SpaceX merger and looming IPO raise the stakes for xAI’s talent crunch

The timing couldn’t be worse. SpaceX recently acquired xAI in a $1.25 trillion all-stock deal, and Musk is eyeing a public listing as early as June. That means more scrutiny and fewer places to hide technical gaps.Meanwhile, Grok has drawn global backlash over deepfake pornography, antisemitic outputs, and underwhelming performance against rivals. Manuel Kroiss, a remaining co-founder and former Google DeepMind engineer, has been promoted to help steady coding operations.