Musk Touts xAI Rebuild as Founders Leave

Elon Musk says his artificial intelligence startup needs to be rebuilt.

“xAI was not built right first time around, so is being rebuilt from the foundations up,” the world’s richest person wrote on his social media platform X last week.

Meanwhile, The Wall Street Journal (WSJ) reported Friday (March 13) that the rebuilding effort is happening as xAI’s founding team is exiting the company.

“Time to recalibrate my gradient on the big picture,” one co-founder wrote in announcing his departure, per WSJ his last day. “My next priorities: sleep for more than 8h,” another wrote last month.

“Wild journey past three years but excited about next chapter,” a third posted Friday on X.

According to a report by the Financial Times (FT) Saturday (March 14) said that Musk had forced out several co-founders out of frustration with xAI’s coding product, while bringing in “fixers” from his other companies to audit the startup. He has also ordered a round job of layoffs, sources told the FT.

This leadership shakeup comes weeks after Musk merged xAI with his rocketship startup SpaceX, valuing xAI at $250 billion. X itself was combined with xAI last year.

This is also, WSJ said, the second time in a month that Musk has announced plans to reorganize xAI. Soon after the SpaceX merger, he said he restructured xAI to “improve speed of execution” and stressed that the company was “hiring aggressively.”

The report points out that xAI is trying to keep pace with OpenAI and Anthropic as those companies attract enterprise customers, something that Musk’s company has struggled to do, especially in terms of automating software engineering. xAI has integrated its Grok chatbot with X, and with some vehicles from the Musk-led car company Tesla.

“We’re currently behind in coding,” Musk told an industry conference last week, per WSJ. “I was just in a giant sort of all-hands on coding, going through all the things that need to happen to essentially exceed our competitors on coding, which I think we’ll do.”

In other AI news, recent PYMNTS Intelligence research finds that for a certain subset of consumers, the technology has become akin to a personal assistant, something they turn to when they want to perform a task and not just look things up.

“What stood out was not just that people are using AI, but how they are using it,” PYMNTS wrote last week. “Consumers are turning to dedicated AI platforms to plan, learn, shop and decide, compressing the familiar search-to-purchase sequence into a more conversational flow where intent is stated once and then refined through follow-up prompts.”

The research shows that more than a third of Gen Z consumers and “power users” — those who perform 25 or more distinct tasks with AI — turned to dedicated AI platforms as their first tool to handle personal tasks.

And of those consumers who chiefly use dedicated AI platforms, 43% said they had fully replaced older methods, while 42% said they now use search less.

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