【International News】xAI Loses Two More Co-Founders! 11 Down to 9, Only 2 Remain. Musk Admits He Built It Wrong the First Time

(Source: Robot Global News)

xAI co-founders have left two more this week.

Excluding Elon Musk himself, 9 out of 11 have departed, leaving only two.

On the same day, xAI recruited two product engineering leads from AI programming company Cursor.

Elon Musk personally responded: xAI was built incorrectly the first time; now we have to rebuild from scratch.

11 founders, 9 gone, nearly the entire founding team has left.

This week, the latest two co-founders to leave xAI are both Chinese.

Zihang Dai’s xAI badge on his X profile has disappeared. Before joining xAI, he worked at Google and holds a Ph.D. in Computer Science from Carnegie Mellon University.

Guodong Zhang just announced his departure. His role at xAI was more critical; he reported directly to Musk and was responsible for the core products Grok Code and Grok Imagine.

When Tony Wu left earlier, Guodong Zhang had just been given greater responsibilities.

Their departures are the latest chapter in the intense wave of resignations since early 2026.

In January, Grok’s chief architect Greg Yang stepped down from daily operations, attributing his Lyme disease diagnosis to “long-term high-intensity work” at xAI.

On February 10, former Google scientist Tony Wu, responsible for reasoning research, left.

Just a day later, on February 11, Jimmy Ba, known for proposing the Adam optimization algorithm, also announced his departure. He previously led AI tutoring features and the development of Grok 4 models.

At the end of February, Toby Pohlen, who led the Macrohard project, also left.

Looking further back, Christian Szegedy, a senior Google scientist who proposed the Inception network architecture, left in February 2025.

Igor Babuschkin left in August 2025 and founded a VC firm focused on AI safety.

The earliest departure was infrastructure head Kyle Kosic, who moved to a competitor, OpenAI, in 2024.

After Dai and Zhang left, only Manuel Kroiss and Ross Nordeen remain of the 11 co-founders who started xAI with Musk in 2023.

Former employees reveal: Where is the flat structure promised?

The intense departure of founders suggests high-level turmoil, but a recent long post by former employee Benjamin De Kraker on X exposes another layer of issues.

Kraker said he joined at a low level but was passionate about xAI. He has a significant following among influential AI figures on X, including Lex Fridman, Marc Andreessen, and others in the tech industry; Musk was also among them.

During his time, xAI repeatedly emphasized two things: the company was a “flat structure” and encouraged employees to “take initiative.”

So he decided to leverage his social influence to do something that aligned with the company’s culture—publicly soliciting suggestions to improve Grok from followers on X, when Grok was still in early version 2.0.

The post went viral beyond expectations. John Carmack, founder of id Software (a personal friend of Musk with 1 million followers), shared the post, and many users submitted improvement ideas. This employee wrote scripts to collect and categorize these ideas, preparing a report to submit to superiors, ultimately reaching Musk.

Then everything took a sharp turn.

The next morning, he received a stern email from his direct supervisor, accusing him of a serious mistake and instructing him not to publicly solicit ideas to improve Grok anymore.

His X account was immediately frozen without explanation. He was asked to delete the viral posts and hundreds of user-submitted suggestions.

He wrote in the post:

This was confusing and upsetting. Similar things happen often—xAI employees come in full of excitement and enthusiasm, only to be crushed by management that hates new ideas.

They fill xAI with middle managers and bureaucrats. This is one of the most corporate-ill places I’ve worked. I entered hoping Musk and xAI would succeed; I left feeling only sadness.

At the end of the post, he added:

That supervisor has left. Everyone I knew at xAI has left.

Musk: The first attempt was wrong; start over

In response to the mass departure of founders, Musk said he would rebuild from scratch.

This aligns with his statement at the February all-hands meeting, where he told employees:

Because we’ve reached a certain scale, we are restructuring the company to improve efficiency. In such situations, some people are better suited for the early stage of a company, while others are not.

The restructuring has had immediate effects.

Since January, xAI has laid off dozens of employees, affecting the Macrohard project and Grok Imagine team. After Pohlen left, the Macrohard project stalled, and Musk later announced on X that xAI was collaborating with Tesla on the project.

On the product side, Musk also publicly admitted setbacks. During the March 12 Abundance Conference, he said:

Grok is currently behind in programming. The reason I was late today is because I just finished a large all-hands meeting about coding, going through all the tasks needed to surpass competitors in coding. I believe we can do it.

Talent movement at xAI is not limited internally.

The talent tug-of-war between xAI and OpenAI has lasted over a year. Besides Kyle Kosic, the earliest co-founder to leave for OpenAI in 2024, other key personnel include former Tesla software VP David Lau, and infrastructure leads Uday Ruddarraju from xAI and X.

In 2025, xAI sued OpenAI, accusing it of poaching former employees and stealing business secrets related to Grok. The lawsuit claimed OpenAI launched an “organized, unfair, and illegal campaign” to plunder xAI’s technology.

However, in February 2026, a California court dismissed the case for lack of sufficient evidence.

This restructuring occurred against the backdrop of SpaceX’s announcement to acquire xAI, with the combined entity valued at $1.25 trillion, leading to fundamental changes in organizational and equity structure.

On March 11, 2026, documents filed with the U.S. Federal Trade Commission revealed that Tesla had received approval to convert its approximately $2 billion investment in xAI into a small stake in SpaceX, representing less than 1% ownership.

All signs point to the same direction:

SpaceX plans to launch an IPO as early as June 2026, with a fundraising target of up to $50 billion and a valuation exceeding $1.75 trillion. If successful, it would surpass Saudi Aramco as the largest IPO in history.

Talent is rapidly leaving, new hires are urgently filling roles, and capital is accelerating restructuring.

Musk responded to all doubts with one sentence: “Tesla was like this too back then.”