Monday night brought news of another departure from Elon Musk’s artificial intelligence company. Yuhuai (Tony) Wu, a co-founder of xAI, announced he was leaving. “It’s time for my next chapter,” Wu wrote in a late-night post on X. He added, “It is an era with full possibilities: a small team armed with AIs can move mountains and redefine what’s possible.”
While this seems like a standard tech industry departure, it is part of a troubling pattern for the lab. Five members of the company’s original twelve-person founding team have now left. Four of those departures have occurred in just the last year.
The exodus includes infrastructure lead Kyle Kosic, who left for OpenAI in mid-2024. Google veteran Christian Szegedy departed in February 2025. This past August, co-founder Igor Babushkin left to found a venture firm. Microsoft alum Greg Yang then departed just last month, citing health issues.
Publicly, all splits have been amicable. There are logical reasons why founders might move on nearly three years in. Elon Musk is a notoriously demanding boss. Furthermore, with SpaceX’s acquisition of xAI complete and an IPO pending in the coming months, those involved have a significant financial windfall approaching. It is also a favorable time for high-level AI researchers to fundraise and start their own ventures.
However, less amicable reasons may also be a factor. The company’s flagship product, the Grok chatbot, has struggled with bizarre behavior and apparent internal tampering. xAI stated that strange behavior was caused by an unauthorized modification to the chatbot’s core instructions, which could easily create friction within the technical team.
Then there were recent changes to xAI’s image-generation tools that flooded the platform with deepfake pornography. This sparked slow-moving but serious legal consequences and regulatory scrutiny in places like the European Union.
Whatever the cause, the cumulative impact of these departures is alarming. A significant amount of work remains at xAI, and an IPO will bring more scrutiny than the lab has ever faced. With Musk advancing plans for orbital data centers, the pressure to deliver on ambitious promises will be intense. The pace of AI model development continues unabated. If Grok cannot keep pace with the latest models from competitors like OpenAI and Anthropic, the company’s impending IPO could suffer.
In short, the stakes are exceptionally high. As xAI moves toward a public offering and pursues grand ambitions, retaining its top AI talent is more critical than ever.