Elon Musk has triggered a fresh wave of departures at xAI, with additional co-founders leaving the company amid dissatisfaction with the startup's coding division performance. According to Financial Times reporting on March 13, 2026, the three-year-old AI company now retains only 2 of its original 12 co-founders.
Key Departures Include Imagine Team Lead
Guodong Zhang, co-founder and head of xAI's Imagine team, informed colleagues he was leaving after being blamed for issues with the coding product and relieved of his primary duties by Musk. Zihang Dai, another co-founder, reportedly departed earlier in the week. The exodus follows a pattern of founder departures that has accelerated since the company's formation in March 2023.
Company Rebuilt "From the Foundations Up"
Less than six weeks after Musk merged SpaceX and xAI in a deal valued at $1.25 trillion, Musk acknowledged that his AI startup "was not built right first time around, so is being rebuilt from the foundations up." Musk brought in personnel from SpaceX and Tesla to audit xAI operations, resulting in the termination of several employees whose work was deemed inadequate.
Staff members have complained that the organizational upheaval is damaging morale and preventing the company from reaching its full potential. Researchers continue to leave due to burnout from Musk's "extremely hardcore" work demands or after receiving better compensation offers from competitors.
SpaceX Hires Cursor Programmers
In a related move, SpaceX announced it hired two programmers from AI coding startup Cursor: Andrew Milich and Jason Ginsberg. Both will report directly to Musk, suggesting a continued focus on AI coding capabilities despite the struggles at xAI.
Key Takeaways
- xAI now retains only 2 of its original 12 co-founders after recent departures of Guodong Zhang and Zihang Dai
- Elon Musk acknowledged xAI "was not built right first time around" and is being rebuilt from the foundations
- SpaceX and Tesla "fixers" conducted audits leading to employee terminations based on performance assessments
- Staff complaints cite damaged morale and burnout from "extremely hardcore" work demands
- SpaceX hired two programmers from AI coding startup Cursor, both reporting directly to Musk