On Monday night, xAI co-founder Yuhuai (Tony) Wu announced that he is leaving the company. “It’s time for the next chapter,” Wu wrote in a post on the late-night X show. “This is a time of possibilities. Small teams armed with AI can move mountains and redefine what is possible.”
That in itself is a fairly standard retirement announcement for an engineer, but it’s part of a troubling pattern for the lab. Five of the company’s 12 founding team members have now left the company, four of whom joined the company just last year. Infrastructure lead Kyle Kosick left for OpenAI in mid-2024, followed by Google veteran Christian Szegedy in February 2025. Igor Babushkin left the company in August to start a venture, and Microsoft alumnus Greg Yang also left the company just last month, citing health issues.
By all accounts, this split was all amicable, and nearly three years later, there are plenty of reasons why some founders may decide to stay in business. Elon Musk is notoriously demanding, and with SpaceX’s acquisition of xAI now complete and an IPO expected in the coming months, everyone involved is in for a pretty big windfall. It’s a great time to raise funding for AI startups, so it’s natural for high-level researchers to want to work independently.
There may also be reasons why they are not very friendly. The company’s flagship product, the Grok chatbot, has been plagued by strange behavior and apparent internal tampering. This can easily cause friction within the technical team. Additionally, recent changes to xAI’s image generation tools have led to deepfake porn flooding the platform, causing slow but real legal repercussions.
Whatever the cause, the cumulative effect is alarming. xAI has a lot of work left to do, and an IPO will bring the most scrutiny the lab has ever faced. Musk has already launched plans for an orbiting data center, and the pressure to deliver on that plan will be enormous. The pace of model development continues unabated, and the IPO could easily take a hit if Grok can’t keep up with the latest models from OpenAI and Anthropic.
In other words, the stakes are high and xAI needs to retain all the AI talent it can.
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