xAI was founded in 2023, and it’s already transforming radically. Now a key part of a bizarre conglomerate that could soon be one of the world’s biggest publicly traded companies, it feels like xAI in particular is becoming the distillation of Elon Musk’s mindset in company form. It’s perhaps not unrelated that its non-Musk creators have now all left the picture.
Other than Elon Musk, none of the 12 original co-founders of xAI still work for the company as of this week, according to Business Insider. The departure of Ross Nordeen, a former Tesla manager in the “autopilot” (driver assistance) division reportedly makes Musk the last founder standing.
Two weeks ago, Elon Musk wrote on X that xAI—the AI company currently owned by SpaceX, and on track for an IPO intended to be the largest ever—“was not built right first time around, so is being rebuilt from the foundations up.” The departures of about half of the co-founders were reported within days of SpaceX’s surprise acquisition of xAI back in February. The steady drumbeat of founder departures continued until Nordeen left this past week.
One could be mistaken for thinking the content of Grok’s output is the cause of this shakeup.
After all, it was founded in March of 2023, which happens to have been a moment in the culture wars when right-wing fervor over the concept of wokeness was at its peak before the frenzy died down a bit, as reflected in Google Trends searches. At that time, Musk was not yet an official part of a Republican presidential administration, but he was beginning to make right-wing politics central to his personal mission, so xAI in its infancy was overtly described as a creator of right-wing alternatives to AI products like ChatGPT.
Last summer, users discovered that Grok was willing to praise Hitler and advocate for Nazi ideas, as catalogued in detail by my colleague Matt Novak. xAI eventually issued a long apology and said it had tweaked Grok’s inner workings.
Late last year, xAI’s signature chatbot, Grok, started being used by X users to effortlessly AI-edit images of other X users without requiring their knowledge or consent. Grok’s integration into X had made this uniquely seamless, requiring only a single post directed at Grok. Many of these images, however, involved sexualized content and near-nudity, and many of those depicted minors. The situation prompted regulators around the world to take various actions. xAI apologized for at least one image, saying it “violated ethical standards and potentially US laws on CSAM.” That apology, it should be noted, was prompted by an X user addressing Grok directly and seeking an apology.
Despite all the controversies, Musk seems largely satisfied with much of the company’s output in recent months. On February 17, he posted that the latest version of Grok, version 4.20, was “BASED” and included screenshots showing that, when compared to other popular chatbots, it refuses to even entertain the idea that the U.S. is “on stolen land.”
But if Musk has signaled a change of direction for xAI’s actual products, it has little to do with the political leanings or troubling behavior of its core model. Instead, the Financial Times reported earlier this month that Musk was letting co-founders go amid turmoil over xAI’s perceived failures around coding.
Appearing on a video call at something called the Abundance Conference this month, Musk said he had just been in an all-hands meeting on coding that had made him late for that very call. He had been, he said, “going through all the things that need to happen to essentially catch up and exceed our competitors on coding, which I think we’ll do. We should probably get there by the middle of this year.”
Starting in 2025 and into this year, Claude, the flagship large language model from xAI’s competitor Anthropic has come to be regarded as an indispensable part of AI coding—particularly coding and other coding-adjacent tasks carried out via agentic AI platforms like OpenClaw. Another of xAI’s competitors, OpenAI, has hired the creator of OpenClaw, and pivoted to business and productivity applications for AI.
So xAI, in conjunction with the computing division at Tesla is launching, well, something or other, and calling the venture “Macrohard.” Musk’s own descriptions of the software Macrohard will produce are overloaded with classic Musk bluster, and unusually tricky to parse for actual content. He says the product he has in mind will be “like a much more advanced and sophisticated version of turn-by-turn navigation software,” but that it will be “capable of emulating the function of entire companies.” What he seems to be gesturing at is a more competent version of OpenClaw.
As a marquee part of SpaceX during its IPO, Musk clearly wants investors to think big, which is why he’s signaling plans to build a Dyson sphere and absorb greater and greater amounts of solar energy, to build AI data centers in space, and to soon surpass all combined human intelligence with AI. Most, if not all, AI company founders make huge promises, but Musk’s promises may just be the biggest.
Oddly, however, the IPO plan would seem to contradict what Musk has said in the past about running public companies: he hates it. Again and again he’s said he can’t stand the pressure put on him as CEO by shareholders expecting returns and the problems of the wider economy. This move will even make X, formerly known as Twitter, part of a public company once again, after the whole point of buying Twitter in the first place seemed to be to take it private.
But xAI would need to build energy infrastructure and data centers fast—and supposedly do so literally in space—in order to secure the top spot on the AI leaderboard. To that end, one possible purpose of the SpaceX IPO comes into focus: Not just to be valued at an estimated $1.75 trillion after the IPO and all that means for Musk’s net worth, but moreover for the company itself to rake in up to $80 billion from investors in the process. Much of that potentially record-breaking amount of investment will be a war chest of spendable, liquid cash.
When you’ve made bonkers promises to the world about building bonkers things, the one thing that can even give you a prayer of realizing it all is a bonkers amount of money.
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