tech
March 14, 2026
'Not built right the first time' -- Musk's xAI is starting over again, again
The AI lab is revamping its effort to build an AI coding tool, with two new executives joining from Cursor.
TL;DR
- xAI is rebuilding its team and strategy, with only two of the original eleven co-founders remaining.
- Elon Musk acknowledges the company was 'not built right first time around' and is being rebuilt.
- The primary competitive pressure comes from rivals like Anthropic and OpenAI, particularly in AI coding tools.
- Two co-founders, Zihang Dai and Guodong Zhang, recently left xAI.
- xAI is working to catch up in AI coding tools, with Musk predicting progress by mid-year.
- Coding tools are seen as key revenue-generating technology for AI labs.
- A month prior, 11 senior engineers, including two co-founders, left xAI following a reorganization.
- SpaceX and Tesla executives have reportedly been involved in evaluating and removing employees at xAI.
- Remaining co-founders are Manuel Kroiss and Ross Nordeen.
- Musk is personally reviewing rejected employment applications to find promising candidates.
- xAI has just over 5,000 employees, compared to OpenAI's over 7,500 and Anthropic's over 4,700.
- Andrew Milich and Jason Ginsberg are joining xAI from Cursor, a company focused on AI coding tools.
- Their move to xAI may indicate the importance of direct access to LLMs and computing resources.
- As part of SpaceX, xAI faces pressure to demonstrate uptake of its LLM, Grok, ahead of a potential SpaceX IPO.
- The Macrohard project, aiming to create an AI agent for white-collar tasks, is reportedly on pause.
- Macrohard is now a joint effort with Tesla, which is developing a complementary agent called 'Digital Optimus'.
- Competitors like Perplexity and OpenAI are also developing similar AI agent functionalities.
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