Elon Musk appears to be re-employing a familiar Tesla-era playbook for his restructuring plans at xAI. However, the stakes are considerably higher now, given the fiercely competitive AI environment and the impending SpaceX initial public offering (IPO).
The recent exodus of xAI's cofounders has raised significant concerns. Ross Nordeen's departure serves as a prime example: the 36-year-old engineer was abruptly cut off from company systems last week and disappeared from a sprawling group chat with CEO Elon Musk and hundreds of other engineers. He later posted a photo of a hiking trail with the caption: "Touching some grass." Nordeen, one of Musk's closest deputies, was the final non-Musk cofounder to exit the startup, making him the eighth to depart in under three months. This rapid unraveling of a founding team is unusually swift at such a pivotal moment in the company's history.
With SpaceX, which merged with xAI in February, racing toward a blockbuster IPO, this shake-up has become a notable spectacle. It raises questions about Musk's motivations, xAI's standing among competitors like OpenAI and Anthropic, and whether this rebuilding phase is merely an iteration of Musk's established playbook or indicative of deeper internal issues.
"Anytime you see mass departures of the founding leadership team, that is a negative signal," Charles Elson, a corporate governance expert, told Business Insider. "If things were bright and rosy for the future, why would you leave? Either you're leaving because you're cashing out, which suggests that you think the thing is overpriced or richly priced, or you're leaving because you don't have faith in the management of the organization going forward. Either way, it doesn't look good."
Franco Granda, a senior research analyst at Pitchbook, added that companies face increased scrutiny in the months leading up to an IPO. While the rocket business will be the core focus of SpaceX's stock, xAI's developments are also under close watch.