Mar 13 (Reuters) – Elon Musk unleashed a new wave of layoffs at his artificial intelligence company xAI, with more co-founders sidelined amid his dissatisfaction with the underperformance of the startup’s coding division, the Financial Times reported on Friday.
Last month, Musk reshaped xAI’s leadership, ahead of an initial public offering that could be among the largest of all time.
The billionaire hired technicians from his SpaceX rocket company and from Tesla to audit xAI, which had laid off several employees whose work was deemed inadequate, according to the newspaper.
The cofounder Guodong Zhang, head of xAI’s Imagine team, told colleagues he was leaving after being held responsible for problems with the coding product and dismissed from his main duties by Musk, the newspaper said, citing two people familiar with the decision.
Zhang confirmed his departure in a post on Musk’s X social network on Thursday.
Zihang Dai, another cofounder, reportedly left xAI early this week. The exits leave the three-year-old AI company with only two of its 12 co-founders who helped Musk establish xAI in March 2023, according to the newspaper.
SpaceX, which bought xAI to build a $1.25 trillion company, did not immediately respond to Reuters’ request for comment.
The XAI team complained that the turmoil is harming morale and preventing it from reaching its full potential, according to the FT.
Researchers continue to leave the company due to burnout from Musk’s extremely demanding workloads or after receiving better offers from rivals.
Recruiters have contacted candidates who had previously been rejected to extend job offers, often with better financial terms, the newspaper said.
‘Many talented people in recent years were turned down for an offer or even an interview at xAI. My apologies,’ Musk said in a post on X on Friday, adding that he will reach out to promising candidates.
XAI lured Andrew Milich and Jason Ginsberg from the Cursor code-generation startup on Thursday.
