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.
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 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, which purchased xAI to create a $1.25 trillion company, did not immediately respond to a Reuters request for comment.
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.
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.
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)
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