Musk Admits Failure on xAI, Will Retool With New Team, New Focus

Saying that the progenitor of Grok, xAI, wasn’t built right, Elon Musk is retooling his artificial intelligence company from the ground up. Never shy to admit failure and start over, the owner of X, SpaceX, and Tesla said xAI, which had 1,200 employees last year, missed the opportunity to hire key tech wizards aligned to his vision to sustain life on the moon, Mars, and beyond. “xAI was not built right first time around, so is being rebuilt from the foundations up. Same thing happened with Tesla,” said Mr. Musk wrote in an X post. He added in a separate post that he and a talent acquisition consultant, Baris Akis, are looking back through previous applications to identify candidates to interview after a purge at the company last month.“Many talented people over the past few years were declined an offer or even an interview @xAI. My apologies,” Mr. Musk posted on Friday morning.The artificial intelligence company was merged with SpaceX in February, leading to the firing of several employees and the departure of most of the company’s original lineup. Co‑founders Guodong Zhang and Zihang Dai announced this week that they are moving on, following eight others who have left since January.xAI, which espouses the philosophy to “maximize truth, minimize censorship,” has already integrated its flagship commercial AI product, Grok, into Tesla’s AI4 hardware and X’s social media platform, but Mr. Musk admits the company has not kept pace with competitors like ChatGPT, DeepMind, and Anthropic. Three-year-old xAI is in catchup mode with a $20 billion funding round in January 2026 and backers including Fidelity, BlackRock, Sequoia, Lightspeed, and Andreessen Horowitz. It has expanded into several spheres including serving business security needs, video generation, and a knowledge system called Grokopedia. However, Grok Code, also known as SuperGrok, which contains models for coding, reasoning, and high‑capacity workloads, needs to improve in order for Mr. Musk to pursue SpaceX’s interplanetary ambitions and Tesla’s Optimus robotics program. Grok effectively is expected to be the brain to Optimus’s body.To that end the company on Thursday announced two high-profile hires, Andrew Milich and Jason Ginsberg, both formerly with Cursor, which is a coding startup company with a reported $50 billion valuation. Mr. Milich was an intern on the Dragon 2 crew at SpaceX a decade ago when the notion of landing on Mars was Mr. Musk’s pipe dream. Mr. Milich says he is returning to X to work on “realizing science fiction — reusable rockets, humanoid robots, data centers in space” as well as a city on Mars.

Musk Admits Failure on xAI, Will Retool With New Team, New Focus

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