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xAI Suffers New Layoffs and Executive Exits as Musk Imports SpaceX/Tesla 'Fixers' to Revive Coding Products

Canopy Business
Elon Musk speaking at AI summit, representing xAI executive upheaval and layoffs

Elon Musk has ordered another round of job cuts at xAI following poor performance of its coding AI products, forcing out several more co-founders and bringing in senior managers from SpaceX and Tesla to conduct an internal audit. The overhaul comes as xAI merges with SpaceX in a $1.25 billion deal and faces a self-imposed June deadline tied to what could be one of the largest IPOs in history. The disruption compounds morale issues at the two-year-old startup as it tries to compete with Anthropic and OpenAI in the rapidly expanding AI coding market.

Key Takeaways

  • xAI merged with SpaceX in a $1.25B deal; June IPO deadline adds pressure to code-product performance metrics
  • Multiple co-founders forced out in latest round; SpaceX and Tesla personnel parachuted in to audit operations
  • xAI coding tools trail Anthropic Claude Code and OpenAI's Codex Security in developer adoption, per FT sources

Original source: Ars Technica / Financial Times