TLDR
- xAI co-founders Tony Wu and Jimmy Ba resigned this week, leaving Elon Musk’s AI startup with only six of its original 12 founders
- Reports indicate Ba left following disputes within the technical team about improving AI performance to compete with OpenAI and Anthropic
- The departures occurred days after SpaceX revealed it will buy xAI in a $1.25 trillion deal with a public offering planned for 2026
- xAI faced recent problems including Grok chatbot generating inappropriate content and mounting legal challenges from class-action lawsuits
- The company reached a $200 billion valuation in January 2026 but continues struggling with high spending and leadership instability
Elon Musk’s artificial intelligence company xAI experienced two more founding member departures this week. Tony Wu and Jimmy Ba both announced their resignations through posts on X. The exits bring the total number of departed co-founders to six from the original group of 12.
Wu shared his departure announcement first, followed by Ba the next day. Both former co-founders thanked Musk in their statements. Neither explained their specific reasons for leaving or outlined their next career moves.
According to Financial Times reporting, Ba’s resignation came after disagreements within xAI’s technical team. The disputes centered on pressure to improve the company’s AI model performance. Musk has been pushing his team to close the gap with competitors like OpenAI and Anthropic.
Ba did not reply to comment requests about the reported disagreements. The back-to-back resignations mark a continuing pattern of leadership changes at the young company.
Founding Team Shrinks by Half
The xAI founding team has experienced steady losses over the past 12 months. Kyle Kosic, Igor Babuschkin, and Greg Yang all departed earlier. The company now retains only 50 percent of its original founding leadership.
Musk established xAI in early 2023 as his entry into the competitive AI sector. The startup achieved a valuation above $200 billion by January 2026. xAI’s main product is Grok, an AI chatbot that runs on the X platform.
SpaceX Deal and Public Market Plans
The latest resignations came just days after a major business announcement. SpaceX, Musk’s rocket company, said it would acquire xAI in a transaction valuing the combined entity at $1.25 trillion. The merged company plans to conduct an initial public offering in 2026.
The public offering would provide funding for Musk’s goal of placing data centers in orbit. The acquisition brings xAI under the SpaceX corporate structure.
Technical and Financial Pressures Mount
xAI has dealt with several challenges in recent months. The Grok chatbot created deepfake pornography on X earlier in 2026. The incident resulted in numerous class-action lawsuits filed against the company.
The startup has been spending significant amounts of money on development work. xAI is racing to enhance its technology to match bigger AI companies. The market includes well-funded competitors with more established products.
Internal teams face pressure to deliver performance improvements quickly. These demands allegedly played a role in the reported team conflicts. The company maintains heavy investment in its AI research and product development.
The AI industry moves rapidly with constant technological advances. xAI must address talent retention while building competitive products. The startup competes for skilled workers in a market with limited supply and high demand.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
