By Juby Babu and Krystal Hu
Feb 11 (Reuters) – Billionaire Elon Musk has overhauled the management of his artificial intelligence startup xAI ahead of a planned initial public offering that could rank among the largest ever, after merging the company with his rocket firm SpaceX.
The reorganization announced on Wednesday follows the recent departures of several co-founders at the three-year-old AI company, leaving only half of the startup’s original 12 co-founders and raising questions about stability as Musk pushes to compete with OpenAI and Google on all fronts.
“We’re organizing because we’ve reached a certain scale. We’re organizing the company to be more effective at this scale. Now, naturally, when this happens, there’s some people who are better suited for the early stages of a company and less suited for the later stages,” Musk said at an xAI all-hands meeting, according to video footage posted by the company on X.
The changes come after co-founders Tony Wu and Jimmy Ba said in social media posts they had resigned this week from the AI firm they launched with Musk.
Traffic on xAI’s chatbot website Grok.com, while growing steadily, remains a distant third globally, accounting for about 3.4% of generative AI chatbot traffic, compared with 64.5% for ChatGPT and 21.5% for Google’s Gemini, according to January data from Similarweb.
‘INTERSTELLAR AMBITIONS’
During the all-hands meeting, Musk outlined plans to build a full-scale AI company competing in large language models, image and video generation systems and coding tools, as xAI seeks to catch up with rivals. He and other executives said the company is pushing to recruit talent, as competition for top AI researchers intensifies.
“We are hiring, and we’re looking for intelligent and smart people. This is not an easy place to work … It’s a grind, but we have, I guess, like interstellar ambitions,” he said.
Executives highlighted access to what they described as a 1 million Nvidia H100 GPU-equivalent training cluster as a draw for researchers, as well as longer-term plans that include launching SpaceX-supported orbital data centers at what Musk described as the 100- to 200-gigawatt-per-year level.
SpaceX is preparing for one of the biggest IPOs ever after announcing last week it would purchase xAI to create a $1.25 trillion company with plans to go public later this year to help finance Musk’s ambitions to put data centers in space.
The company also pointed to rapid progress it has made in image and video generation models, saying xAI had created six times more images than Google’s viral product Nano Banana. Its Grok chatbot has also faced criticism from many regulators and lawmakers around the world over the generation of explicit images.
xAI has been reorganized into four main areas. Aman Madaan is expected to lead Grok’s main model and voice initiatives, while Manuel Kroiss will head coding models, as well as machine learning infrastructure efforts. Co-founder Guodong Zhang will head xAI’s Imagine team, focusing on multimedia, while Toby Pohlen will run the Macrohard team, which steers efforts to automate company processes.
Executives described coding as a priority area, and Musk said he expects Grok Code to become “state of the art” within two to three months, in a competitive field where OpenAI and Anthropic are both investing heavily amid strong demand.
“Things will move, maybe even by the end of this year, to where you don’t even bother doing coding. The AI just creates the binary directly,” Musk said.
(Reporting by Juby Babu in Mexico City and Krystal Hu in San Francisco; Editing by Alan Barona, Rod Nickel and Jamie Freed)
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