Monday night, xAI co-founder Yuhuai (Tony) Wu announced he was leaving the company. “It’s time for my next chapter,” Wu wrote in a late-night post on X. “It is an era with full possibilities: a small team armed with AIs can move mountains and redefine what’s possible.”
On its own, it’s a pretty standard tech departure announcement — but it’s part of a troubling pattern for the lab. Five members of the company’s 12-person founding team have now left the company, with four of the departures coming in just the last year. Infrastructure lead Kyle Kosic left for OpenAI in mid-2024, followed by Google veteran Christian Szegedy in February 2025. This past August, Igor Babushkin left to found a venture firm, and Microsoft alum Greg Yang departed just last month, citing health issues.
By all accounts, the splits have all been amicable, and there are lots of reasons why, nearly three years in, some founders might decide to move on. Elon Musk is a notoriously demanding boss, and with the SpaceX’s acquisition of xAI complete and an IPO pending in the coming months, everyone involved has a pretty big windfall coming. It’s a great time to be fundraising for an AI startup, so it’s only natural for high-level researchers to want to strike out on their own.
There are also less amicable reasons that might factor in. The company’s flagship product, the Grok chatbot, has struggled with bizarre behavior and apparent internal tampering — the kind of thing that might easily create friction on the technical team. Then there were the recent changes to xAI’s image-generation tools that flooded the platform with deepfake pornography, sparking slow-moving but real legal consequences.
Whatever the cause, the cumulative impact is alarming. There is a lot of work left to do at xAI, and an IPO will bring more scrutiny than the lab has ever faced before. With Musk already spinning up plans for orbital data centers, the pressure to make good on those plans will be intense. The pace of model development isn’t slowing down, and if Grok can’t keep pace with the latest models from OpenAI and Anthropic, the IPO could easily suffer.
In short, the stakes are high, and xAI needs to hold on to all the AI talent it can.
