March 13 (Reuters) – Elon Musk has triggered a new wave of layoffs at his artificial intelligence company xAI, with more co-founders ousted amid dissatisfaction with the underperformance of the startup’s coding division, the Financial Times reported on Friday.
Last month, Musk revamped xAI’s management, ahead of an initial public offering that could be among the biggest ever.
The billionaire hired technicians from his rocket company, SpaceX, and Tesla to audit xAI, which fired several employees whose work was deemed inadequate, according to the newspaper.
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Co-founder Guodong Zhang, head of xAI’s Imagine team, told peers he was leaving after being blamed for problems with the coding product and relieved of his core duties by Musk, the newspaper said, citing two sources familiar with the decision.
Zhang confirmed his departure in a post on Musk’s social network X on Thursday.
Zihang Dai, another co-founder, reportedly left xAI earlier this week. The departures leave the three-year-old AI company with just two of its 12 co-founders who helped Musk create xAI in March 2023, according to the newspaper.
SpaceX, which bought xAI to create a $1.25 trillion company, did not immediately respond to a Reuters request for comment.
XAI staff have complained that the unrest is hurting morale and preventing it from reaching its full potential, according to the FT.
Researchers continue to leave the company due to burnout due to Musk’s ‘extremely harsh’ job demands or after receiving better offers from rivals.
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Recruiters have been contacting candidates who had previously been rejected to extend job offers, often on better financial terms, the newspaper said.
‘Many talented people in recent years have been turned down for an offer or even an interview at xAI. My apologies,’ Musk said in an X post on Friday, adding that he will be in touch with promising candidates.
xAI attracted Andrew Milich and Jason Ginsberg from code generation startup Cursor on Thursday.
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