All of the co-founders Elon Musk recruited to build xAI have reportedly left the company. Manuel Kroiss, who led the pre-training team, told people this month that he was leaving. Ross Nordeen, described by Business Insider as “Musk’s”right hand operator“, they left on Friday. They were the last two of eleven co-founders, all of whom left a company that was valued at $250 billion when SpaceX acquired it in February and that Musk himself described two weeks ago as “not built correctly the first time.”
Exits are no ordinary startup burnout. The researchers Musk assembled in 2023 were among the most prominent in artificial intelligence. Jimmy Ba co-authored the 2014 Adam optimization paper, the most cited paper in AI with over 95,000 citations. Igor Babuschkin, the chief engineer, came from Google DeepMind. Christian Szegedy came from Google. Tony Wu led the reasoning team. Greg Yang, Toby Pohlen, Zihang Dai, Guodong Zhang, and Kyle Kosic brought their experience from DeepMind, Google, Microsoft, and OpenAI. That entire cohort is no more and the company they helped build is being, in Musk’s words, “rebuilt from the ground up.”
A timeline of unraveling
The exodus accelerated dramatically in early 2026. Christian Szegedy left in February 2025, an early sign. But the cascade began in earnest when Tony Wu, one of the most operationally central co-founders, announced his departure on February 10, 2026. Jimmy Ba resigned within 24 hours, reportedly amid tensions over demands to improve model performance. By mid-March, only Kroiss and Nordeen remained. Their departures this week complete the sweep.
It’s hard to separate the moment from the corporate restructuring happening around xAI. On February 2, SpaceX acquired xAI in an all-stock transaction that valued SpaceX at $1 trillion and xAI at $250 billion, creating a combined entity worth $1.25 trillion, the largest corporate merger by valuation in history. The deal brought together xAI,
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Weeks earlier, in January, Tesla invested $2 billion in xAI’s Series E round at a valuation of approximately $230 billion. Tesla shareholders are suing Musk for breach of fiduciary duty on the investment, arguing that the company’s CEO effectively directed shareholders’ capital toward his own private company. The lawsuit gained additional traction on March 13, when Musk publicly acknowledged that xAI’s products, particularly its coding tools, were not competitive with Anthropic’s Claude Code or the OpenAI Codex. Tesla had invested $2 billion in a company whose founder admitted it needed to be rebuilt from the ground up.
What “not built well” means at $250 billion
Musk’s admission on March 13 was unusually candid for a CEO whose company had just been acquired for a quarter of a billion dollars. He said xAI’s AI coding tools simply weren’t working and the underlying system needed to be rebuilt. The statement seemed to validate the co-founders’ decision to leave: If the company’s own leaders acknowledge that the product failed, the researchers who built it have limited incentives to stay during the rebuild, particularly when they can demand extraordinary compensation from competitors.
The AI talent market in 2026 will be the most competitive it has ever been. Meta has reportedly offered packages worth up to $300 million. more than four years to retain the best AI researchers. OpenAI, Google DeepMind, and Anthropic are aggressively expanding their research teams. The eleven researchers who left xAI represent a concentration of talent that any of those companies would pay handsomely to acquire. Where they end up will say as much about the future direction of the industry as their departure says about xAI’s past.
xAI is not without assets. The Colossus supercomputer, built with more than 200,000 NVIDIA H100 GPUs, remains one of the largest AI training clusters in the world. Grok, the company’s chatbot, has a distribution channel through X’s user base. And the SpaceX merger provides access to capital, infrastructure and engineering talent at a scale that few AI companies can match. The question is whether infrastructure and distribution are sufficient when the research leadership that was supposed to make the product competitive has completely disappeared.
the pattern
The exodus of the xAI co-founder follows a pattern that has been repeated in all of Musk’s companies. Twitter lost most of its senior managers and approximately 80 percent of its workforce just months away from its acquisition in 2022. Tesla’s top leadership has been steadily reduced as Musk’s attention has been divided among six companies. The common thread is a management style that produces extraordinary results in hardware engineering, where Musk’s tolerance for risk and pace of iteration have turned SpaceX and Tesla into industry-defining companies, but seems less effective in research-driven fields where the most valuable people have abundant alternatives and low tolerance for instability.
Research in artificial intelligence will, in 2026, be the most competitive job market in technology. The researchers who co-founded xAI didn’t need to be there. They chose to be, attracted by the resources that Musk could deploy and the ambition of the project. The fact that each of them decided to leave, during a period in which the company received a $250 billion valuation and access to SpaceX resources, suggests that the problems at xAI are not primarily financial or infrastructure. They are organizational. And no amount of capital can rebuild a research culture once the people who created it are gone.
