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The restructuring follows the departure of two of xAI’s co-founders earlier this week and comes at a time when Musk’s AI operations are facing growing scrutiny from regulators and industry watchers alike.
“The reorganisation was done to improve speed of execution,” Musk said in a post on X, adding that the company is “hiring aggressively.” However, he did not specify which employees had been cut or who may have resigned voluntarily.
xAI was reorganized a few days ago to improve speed of execution. As a company grows, especially as quickly as xAI, the structure must evolve just like any living organism.
This unfortunately required parting ways with some people. We wish them well in future endeavors.
We are… https://t.co/kfmSmBlieb
— Elon Musk (@elonmusk) February 11, 2026
The development marks the latest shift inside Musk’s AI ecosystem as SpaceX, which recently acquired xAI in a record-setting all-stock deal, prepares for a public offering later this year.
Co-founders exit amid internal shake-up
xAI has seen a wave of senior-level exits in recent months, underscoring turbulence at the ambitious startup Musk launched in 2023 to “understand the true nature of the universe.”
Earlier this week, Jimmy Ba and Tony Wu announced their departures, following a string of co-founders who left earlier, including Igor Babuschkin, Kyle Kosic, Christian Szegedy, and Greg Yang.
The departures coincide with xAI’s growing integration into SpaceX after a landmark merger valued the aerospace firm at $1 trillion and xAI at $250 billion, according to documents reviewed by CNBC.
The deal made SpaceX the owner of both xAI and social network X, the platform formerly known as Twitter, which xAI had acquired in March 2025.
Musk framed the restructuring as a necessary step to streamline decision-making and speed up product development. “We are hiring aggressively,” he wrote, signalling a renewed focus on expanding xAI’s capabilities despite leadership churn.
Regulatory scrutiny builds over Grok’s misuse
The internal reshuffle comes as xAI faces regulatory probes in multiple regions, including the US, Europe and Asia, over the misuse of its AI chatbot Grok. Investigators are examining whether the company violated local laws after Grok’s image-generation tools were reportedly used to create and distribute non-consensual explicit images, often referred to as deepfake porn.
The images were based on real people, including children, raising global concerns about AI safety, content moderation, and ethical accountability. The controversy has led to mounting pressure on xAI to implement stronger safeguards and transparency measures to prevent further misuse of its technology.
Despite these challenges, Musk has continued to position xAI as a key part of his broader technology portfolio, alongside SpaceX and X. With the merger now complete, analysts believe the integration could accelerate the company’s AI development efforts while consolidating Musk’s control across his technology ventures.
A crucial year ahead
Founded in 2023 with a team of twelve researchers, xAI emerged as Musk’s direct response to OpenAI and Google DeepMind, aiming to build an AI system capable of reasoning about the universe itself. Its products, including the Grok chatbot, were marketed as alternatives to OpenAI’s ChatGPT.
Now, as the company restructures under SpaceX and faces tightening regulation, its future direction appears at a crossroads.
Musk’s focus on “speed of execution” suggests an aggressive drive to stabilise operations and maintain momentum in the AI race, even as questions mount about leadership stability and ethical responsibility.
