xAI Co-Founders Exit Amid SpaceX Merger Chaos as Leadership Purge Continues
Two more co-founders of Elon Musk's xAI have resigned following the controversial merger with SpaceX and X, deepening concerns over corporate instability. Their public departures, citing cultural misalignment and operational chaos, come as the newly consolidated entity faces scrutiny over its $1.25 trillion valuation and internal turmoil.
Amid escalating internal unrest, two additional co-founders of xAI have officially departed the company following its high-profile merger with SpaceX and X, marking the latest chapter in what insiders describe as a sweeping corporate reorganization under Elon Musk’s centralized leadership. The merger, reportedly valuing the combined entity at $1.25 trillion — the largest in corporate history — has triggered a wave of executive exits, with at least six of xAI’s original co-founders now having left since the announcement last week. Their resignations, often accompanied by detailed public statements, underscore growing unease over the integration’s speed, cultural incompatibility, and the erosion of xAI’s original mission to advance artificial intelligence for scientific discovery.
According to reports from technology industry analysts, the departing founders cited a fundamental shift in priorities as the primary reason for their exit. Where xAI was initially founded on principles of open research and ethical AI development, the post-merger structure appears to have prioritized integration with Musk’s broader ecosystem — particularly the monetization of Grok, xAI’s AI-powered chatbot, across the X platform. One departing co-founder, in a LinkedIn post, wrote: "We built xAI to push the boundaries of understanding, not to optimize ad engagement metrics. The soul of the project has been compromised."
The timing of the departures coincides with internal memos leaked to multiple media outlets, revealing that Musk has mandated a 30% workforce reduction across the merged entities and consolidated reporting structures under a single command hierarchy. Engineers and researchers who once operated with academic autonomy now report being pulled into product development cycles aligned with X’s social media metrics, leading to widespread demoralization. Several engineers have reportedly transferred to rival AI firms, including Anthropic and Meta AI, seeking environments less tethered to commercialized AI outputs.
While Musk has publicly framed the merger as a "synergistic unification" to accelerate AI innovation, critics argue that the integration has instead created operational chaos. The merger brought together SpaceX’s aerospace engineering culture — highly structured, safety-obsessed, and mission-driven — with xAI’s academic research ethos and X’s fast-paced, engagement-driven social media environment. Analysts note that these cultures are not only incompatible but actively antagonistic. "You can’t fuse a rocket science team with a Twitter content moderation team and expect harmony," said Dr. Lena Torres, a corporate culture specialist at Stanford’s Graduate School of Business. "The result is attrition, not synergy."
Legal and financial analysts are also questioning the $1.25 trillion valuation, which far exceeds the combined market caps of Apple, Microsoft, and Alphabet. Experts suggest the figure may be based on speculative future revenue projections tied to AI-driven advertising and subscription services on X, rather than tangible assets or current earnings. The Securities and Exchange Commission is reportedly reviewing the merger’s financial disclosures, though no formal investigation has been announced.
As the exodus continues, questions mount over xAI’s long-term viability. The departure of its founding scientists — many of whom were recruited from DeepMind, OpenAI, and academic institutions — raises concerns about intellectual capital flight. Meanwhile, Musk has yet to appoint a new CEO for xAI, leaving the AI division under his direct oversight alongside SpaceX and X. Employees describe a work environment increasingly dominated by last-minute directives and public Twitter threads that override internal strategy meetings.
For now, the future of xAI hangs in the balance. While Musk remains publicly confident, the exodus of its original architects signals a profound transformation — one that may have sacrificed the very innovation it was meant to amplify.
