UPDATE 5-Musk reorganizes xAI after SpaceX merger and ahead of blockbuster IPO

Elon Musk overhauled ‌the ​management of his artificial intelligence startup xAI ahead of a planned initial public offering that could rank among the largest ever, after merging the company with his rocket firm SpaceX. The reorganization follows the recent departures of several co-founders at the three-year-old ‌AI company, leaving only half of the startup’s original 12 co-founders and raising questions about stability as Musk pushes to compete with OpenAI and Google on all fronts.

"We're organizing because we've reached a certain scale. We're organizing the company to be more effective at this scale. Now, naturally, when this happens, there's some people who are better suited for ‌the early stages of a company and less suited for the later stages," Musk said at a company all-hands meeting posted on X. The changes come after ‌co-founders Tony Wu and Jimmy Ba said in social media posts they had resigned from the AI firm they launched with Musk. 'INTERSTELLAR AMBITIONS'

During the meeting, Musk outlined plans to build a full-scale AI company competing in large language models, image and video generation systems, and coding tools, as xAI seeks to catch up with rivals. He and other executives said the company is pushing to recruit talent, as competition ⁠for top ​AI researchers intensifies. "We are hiring, and we're looking ⁠for intelligent and smart people. This is not an easy place to work ... It's a grind, but we have, I guess, like interstellar ambitions," he said.

Executives highlighted access to what they described as ⁠a 1 million GPU-equivalent training cluster as a draw for researchers, as well as longer-term plans that include launching SpaceX-supported orbital data centers at what Musk described as the 100- to 200-gigawatt-per-year ​level. SpaceX is preparing for one of the biggest IPOs ever after announcing last week it would purchase xAI to create a $1.25 trillion company with plans ⁠to go public later this year to help finance the billionaire's ambitions to put data centers in space. The company also pointed to rapid progress it has made in image and video generation models, saying xAI had ⁠created ​six times more images than Google’s viral product Nano Banana. Its technology has also faced criticism over the generation of explicit images.

xAI has been reorganized into four main areas. Aman Madaan is expected to lead Grok’s main model and voice initiatives, while Manuel Kroiss will head coding models, as well as machine learning infrastructure efforts. ⁠Co-founder Guodong Zhang will head xAI's Imagine team, focusing on multimedia, while Toby Pohlen will run the Macrohard team, which steers efforts to automate company processes. Executives described coding as ⁠a priority area, and Musk said he ⁠expects Grok Code to become “state of the art” within two to three months, in a competitive field where OpenAI and Anthropic are both investing heavily amid strong demand.

"Things will move, maybe even by the end of this year, to where you ‌don't even bother doing coding. ‌The AI just creates the binary directly," Musk said.