On March 13, 2026, xAI founder and CEO Elon Musk issued a rare public apology on X, admitting the company "was not built right initially" and announcing it would "rebuild from the foundations up." The statement came as a mass exodus among xAI's founding team reached a peak: of the company's original 12 co‑founders, only three, including Musk himself, remain; the other nine have departed. This wave of departures accelerated from late 2025 and peaked in February–March 2026, marking the most serious internal crisis in xAI's three‑year history. Major outlets including Bloomberg, Reuters, the Financial Times and Seeking Alpha have reported in detail, prompting broad industry debate over the governance model of "super‑founder" companies in AI.
Timeline of departures: from gradual attrition to collective exit
xAI was founded in July 2023 by Musk and 11 co‑founders, initially comprising top talent from OpenAI, Google DeepMind, Microsoft and other leading institutions, with the aim of building an AI company dedicated to "pursuing maximum truth." However, the team's stability lasted less than two years.
- Second half of 2024 to early 2025: the first wave of departures appeared. Infrastructure lead Kyle Kosic moved to OpenAI, and former Google engineer Christian Szegedy left in February 2025.
- Second half of 2025: departures accelerated. Igor Babuschkin left to found a venture fund, and Greg Yang withdrew for health reasons.
- February 2026: departures reached a peak. Co‑founders Tony Wu and Jimmy Ba announced their departures within 48 hours, marking the founding team’s reduction by half.
- March 2026: the exodus hit its zenith. Image‑generation lead Guodong Zhang, his close collaborator Haotian Liu (citing "burnout"), and another core co‑founder Zihang Dai left successively. As of March 13, only Manuel Kroiss and Ross Nordeen remained at the company.
Musk wrote on X: "Over the past few years, many talented people applied to xAI and were rejected, not even given interview opportunities. I apologize for that." He said he would work with head of talent engineering Baris Akis to review the company's past interview records and proactively reach out to candidates who had been missed. At the same time, he has moved managers from Tesla and SpaceX into xAI to conduct a comprehensive audit and push the company to rebuild from the ground up.
Reasons for departures: internal pressure, merger reorganization and cultural conflict
Many departing employees did not publicly detail their reasons, but insiders and media reports identified several core causes:
- Early structural problems — Musk himself acknowledged that "xAI was not built right initially." The early company relied heavily on Musk's personal authority, with centralized decision‑making and extremely rapid iteration, leaving technical teams under prolonged high pressure. Several co‑founders privately said product directions changed frequently and resources were unevenly allocated.
- Reorganization pressure after the SpaceX–xAI merger — In February 2026 xAI merged with SpaceX (valued at about $1.25 trillion) in preparation for an IPO. The merger triggered major organizational adjustments: the programming division was publicly criticized by Musk for underperformance, and some co‑founders were relieved of core responsibilities. Guodong Zhang and others quickly lost key management authority after the merger and ultimately chose to leave.
- Vicious cycle of talent loss — The departures themselves became a catalyst for further exits. After early core members left, remaining staff faced greater pressure; some exited citing burnout or dissatisfaction with the company's direction. The Financial Times reported that the programming product "Macrohard" underperformed, leading to accountability for several technical leads.
- Cultural and incentive conflicts — xAI emphasized a "maximum‑truth pursuit" and rapid iteration, while some co‑founders favored a more measured research approach. Post‑merger commercialization pressures intensified conflicts with the founding team's idealism.
Consequences: company rebuild and industry shock
Direct impact on xAI:
- Accelerated organizational rebuild: Musk has redeployed Tesla and SpaceX management into xAI to conduct comprehensive audits and personnel optimization. The company is recruiting heavily, with a focus on high‑quality candidates previously rejected.
- Short‑term instability: the large loss of founding members has created knowledge gaps and disrupted continuity, delaying some projects such as image generation. Investors have questioned xAI's IPO prospects and the stock has come under short‑term pressure.
- Strategic adjustments: Musk said he will "rebuild from the foundations," which may include redesigning the organizational structure, reprioritizing products, and strengthening synergies with Tesla and SpaceX.
Indirect industry effects:
- Increased talent mobility: many departing xAI staff have moved to competitors like OpenAI and Anthropic or started their own companies, further driving up AI talent compensation and turnover.
- Governance model reassessment: the Musk‑style "super‑founder" company model has again exposed risks of senior leadership‑centric governance. The industry is debating how to balance rapid iteration with team stability.
- AI ecosystem impact: as the parent of the Grok model, xAI's instability could temporarily slow Grok series iterations, though Musk's determination to rebuild also signals the company's potential resilience.
Musk's rare apology and self‑reflection
Musk's public apology was highly unusual. He not only acknowledged early construction problems but also took responsibility for past hiring mistakes and pledged to reexamine all rejected resumes. The move has been interpreted as a sign of serious introspection and could open a new window for xAI to attract talent.
Bloomberg analysis suggests that despite the severity of the departures, xAI still has strong recovery capacity due to Musk's personal influence and financial resources. The company may place greater emphasis on team stability and sustainable growth over pure speed in the future.
Conclusion: rebuild signals behind the turmoil
The dramatic shift from 12 co‑founders to only a few remaining, and Musk's public apology and launch of a comprehensive rebuild, illustrate both the growing pains and resilience of a super‑founder company. The episode exposes AI startups' challenges in talent management during rapid expansion and serves as a warning: technical breakthroughs and team stability are equally important.
Whether xAI can regain momentum through reconstruction will directly affect the competitiveness of the Grok series and the broader open AI ecosystem. Musk's moment of reflection may mark a turning point from "wild growth" to more mature governance.
In the heated AI competition of 2026, xAI's turmoil reminds us that even a super‑founder like Elon Musk must confront the human variable.
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