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Musk orders new cuts in xAI after coding failure

The start-up's reorganisation comes at a crucial time for the global race for artificial intelligence, which is increasingly dominated by a few big players

13 March 2026

3' min read

Translated by AI

Versione italiana

3' min read

Translated by AI

Versione italiana

Elon Musk has ordered a new wave of cutbacks at his artificial intelligence startup xAI after expressing frustration with the poor performance of the coding product developed by the company. According to the Financial Times, the South African entrepreneur has initiated an internal review of the company by bringing in managers from SpaceX and Tesla to evaluate the work of the technical teams and relaunch the company.

Indeed, the restructuring comes at a difficult time for xAI, which is struggling to keep up with its main competitors in the field of artificial intelligence-based programming tools. Products such as Claude Code by Anthropic and Codex by OpenAI have rapidly gained ground in the software industry, while the Grok chatbot and coding system developed by xAI have so far failed to gain traction among paying users and corporate customers, according to the UK newspaper.

To address the problem, Musk decided to intervene directly in the company structure. Executives and engineers from SpaceX and Tesla were tasked with examining the work of xAI employees and checking the quality of the projects developed, with the result that some were dismissed after their performance was judged inadequate. The internal analysis focused, in particular, on the quality of the data used to train artificial intelligence models, which was considered one of the causes of the delay in the development of coding tools.

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The operation immediately led to new exits among the company's founders. Zihang Dai, one of the most senior members of xAI's technical staff, left the company this week. Guodong Zhang, head of pre-training for Grok models, informed colleagues of his decision to resign after being held responsible for problems with the coding product and relieved of his duties.

Not a bolt out of the blue, as the previous months had already been marked by a series of internal changes. The co-founders who left the company also include Greg Yang, Tony Wu and Jimmy Ba. At the moment, according to the Financial Times, only two of the co-founders who had contributed to the birth of xAI in San Francisco in March 2023 remain: Manuel Kroiss, known as 'Makro', and Ross Nordeen.

The startup's attempt to relaunch itself also passed through the 'Macrohard' project, with which Musk aims to develop digital agents capable of replicating the work of entire software companies. The project had been entrusted to researcher Toby Pohlen, formerly of DeepMind, who, however, packed his bags after just sixteen days.

Also helping to explain the restructuring is Elon Musk's strong pressure on xAI after the merger with SpaceX, which aims to create a technology group worth an estimated USD 1,250 billion and which paves the way for a possible stock market listing that could become one of the largest ever.

Musk himself, moreover, has publicly acknowledged the start-up's problems. "xAI wasn't built right the first time, so it's being rebuilt from the ground up", he wrote last Thursday on X, adding that a similar process had happened in Tesla's early years.

Meanwhile, the company has also launched a new recruitment campaign to rebuild the purged technical teams. Recruiters are recontacting candidates who had previously been rejected in the selection process to offer them new positions, often with improved economic conditions. "Many talented people in recent years have not received an offer or even an interview from xAI. I apologise, Musk wrote on X, explaining that he intends to review the selection history to contact the most promising candidates again.

Despite the start-up's difficulties, however, the former number one at the US Department of Government Efficiency continues to outline rather ambitious technological goals for its industrial ecosystem, such as the construction of data centres for artificial intelligence in space, the creation of industrial infrastructure on the Moon and, in the long term, the colonisation of Mars. Goals that make it strategic for the billionaire to turn xAI into a competitive platform in the global race to develop artificial intelligence.