Elon Musk has conceded that xAI, the generative AI company he founded in 2023, was 'not built right', as the startup contends with a significant leadership exodus and a stalling push into AI coding.
Half of xAI's co-founders have left the company over recent months, according to MarketWatch. The Financial Times, which first reported the departures, said Musk pushed out several of the founders as the firm's AI coding effort ran into difficulty — a strategically important front given the fierce competition from OpenAI's Codex, Anthropic's Claude, and a clutch of well-funded startups.
The nature of the exits matters: founders being removed rather than leaving voluntarily suggests internal disagreements over strategy or execution, rather than the ordinary churn of an early-stage company. XAI raised $6bn in a funding round in late 2024 at a reported valuation of $50bn, making the organisational turbulence notable for outside investors. XAI's flagship product, the Grok chatbot, is integrated into X, Musk's social media platform, and competes directly with models from OpenAI and Google. The company has positioned AI coding as a key growth area, but the FT's reporting suggests that effort has not progressed as planned.
Musk's admission that the company was structurally flawed is an unusual public concession, though it may also be read as an attempt to get ahead of a narrative that the departures would otherwise define.
