Elon Musk’s xAI shake-up amid co-founders’ departure: What’s next for AI venture?

Elon Musk has taken a rare step following the departure of two xAI co-founders, Jimmy Ba and Yuhuai (Tony) Wu.

On Wednesday, the founder of xAI published a full 45-minute all-hands meeting video on X. In a publicly accessible meeting, Musk announced the major reorganization related to xAI.

The announcement comes just days after the strategic merger of xAI with SpaceX, aiming to build data centers in orbit.

Here are the key elements of the recent shake-up announced by Elon Musk.

Departure of employees

According to the CEO of SpaceX, the reorganization would involve the departure of some employees. The structural change is driven by the rapid growth of xAI.

Musk said on X, “As a company grows, especially as quickly as xAI, the structure must evolve. This unfortunately required parting ways with some people. We wish them well in future endeavors.”

“Because we reached a certain scale, we’re organizing the company to be more effective at this scale,” he added.

Structuring into four teams

The 54-year-old billionaire also unveiled a new organizational structure for xAI, dividing it into four primary teams.

• One team will focus on Grok chatbot
• Second team will perform and oversee coding-specific AI model
• Third team will be dedicated to work on image-generation model
• Fourth team will work on Macrohard project

Prominence of Macrohard project

The Macrohard project was announced by Musk in 2025. The project spans from simple computer use simulation to modelling entire corporations.

According to Musk, “This project is probably our most important, because what we’re talking about is: emulation of entire human companies.”

“When you look at the most valuable companies in the world, their output is digital, so it should be possible to emulate any company where the output is digital. This will usher in an era of prosperity... It's a big deal,” he affirmed.

xAI outpaces rivals in video generation

Musk also claimed the growing popularity of xAI as it has been successful in outcompeting the rivals in image and video generation and voice-based AI.

“If you’re moving faster than anyone else, you will be the leader. And xAI is moving faster than anyone else,” Musk said.

According to their internal metrics, xAI’s Imagine tool is generating 50 million videos a day, and more than 6 billion images over the past 30 days. xAI now possesses an average of 600 million monthly users of the X app.

Future plans

According to the CEO of Tesla, the company is also planning to launch X Money feature and X Chat app in the coming months.