Finance
Musk ousts more xAI founders as AI coding effort falters, FT reports
Published by Global Banking & Finance Review®
Posted on March 13, 2026
2 min readLast updated: March 13, 2026
Quick Summary
Elon Musk has ousted additional xAI co‑founders following underperformance in the coding division, part of a broader restructuring tied to the SpaceX merger and looming IPO. The departures deepen a brain drain that jeopardizes morale amid fierce competition in AI.
Elon Musk Forces Out More xAI Founders over Underperformance in Coding Team
xAI Leadership Shakeup and Coding Division Challenges
March 13 (Reuters) - Elon Musk has triggered a fresh wave of job cuts at his AI firm xAI, with more co-founders pushed out amid his dissatisfaction with the underperformance of the startup's coding division, the Financial Times reported on Friday.
Musk last month overhauled the management of xAI, ahead of a planned initial public offering that could rank among the largest ever, after merging the company with his rocket firm SpaceX.
Management Overhaul and Audits
He bought in "fixers" from SpaceX and Tesla to audit xAI, who let go of several employees whose work was deemed inadequate, according to FT.
Co-Founder Departures
Co-founder Guodong Zhang, head of xAI's Imagine team, told colleagues he was leaving after being blamed for issues with the coding product and relieved of his primary duties by Musk, the report said, citing two people familiar with the decision.
He confirmed his departure in a post on X on Thursday.
Zihang Dai, another co-founder, reportedly left xAI earlier this week. The exits leave the three-year-old AI company with only two of its 12 co-founders who helped Musk set up xAI in March 2023, according to the report.
SpaceX Involvement and IPO Plans
SpaceX, which purchased xAI to create a $1.25 trillion company, did not immediately respond to a Reuters request for comment.
Morale, Burnout, and Recruitment
XAI staff have complained that the upheaval is damaging morale and standing in the way of it reaching full potential, the FT report said.
Researchers continue to leave because of burnout because of Musk's "extremely hardcore" work demands or after receiving better offers from rivals.
Recruitment Efforts and Apologies
Recruiters have been contacting candidates who had previously been rejected to extend job offers, often with improved financial terms, the report said.
"Many talented people over the past few years were declined an offer or even an interview at xAI. My apologies," Musk said in an X post on Friday, adding that he will reach back out to promising candidates.
New Hires from Cursor
xAI bought in Andrew Milich and Jason Ginsberg from code-generation startup Cursor on Thursday.
(Reporting by Juby Babu in Mexico City; Editing by Arun Koyyur)
Key Takeaways
- •More xAI co‑founders, including Guodong Zhang and Zihang Dai, have been pushed out as Musk brings in 'fixers' from SpaceX and Tesla to address shortcomings in the coding team (Reuters via FT).
- •This wave of exits follows earlier departures—including Tony Wu and Jimmy Ba in February 2026—leaving only half of xAI's original 12 co‑founders still at the company; these attritions reflect tensions over technical performance and restructuring after the SpaceX integration (Reuters, Fortune).
- •The exodus, coupled with ongoing morale issues, burnout, and recruiters poaching talent, raises questions about xAI’s ability to execute on its costly ambitions ahead of its projected IPO (FT, TechCrunch).
Frequently Asked Questions about Musk ousts more xAI founders as AI coding effort falters, FT reports
1Why did Elon Musk initiate further job cuts at xAI?
Elon Musk initiated job cuts at xAI due to his dissatisfaction with the underperformance of the company's coding division.
2Which xAI co-founders have recently left the company?
Co-founders Guodong Zhang and Zihang Dai have recently left xAI, leaving only two of the original 12 co-founders.
3How is the recent management overhaul impacting xAI staff?
The ongoing management changes and job cuts have damaged morale at xAI, leading to researcher departures and concerns about the company reaching its potential.
4What is the significance of xAI's potential IPO?
The planned xAI IPO could rank among the largest ever, especially after the company merged with SpaceX to create a $1.25 trillion business.
5How is Elon Musk addressing previous xAI hiring decisions?
Elon Musk apologized on X for declining many talented candidates in the past and said he would reach back out to promising ones.
