Jimmy Ba confirmed his departure from Elon Musk's xAI on Tuesday in a post on X, making him the sixth of twelve original cofounders to leave the AI startup since its 2023 founding. Ba, a University of Toronto professor who led research, safety, and enterprise efforts, reported directly to Musk, Business Insider reported. His exit came one day after Tony Wu announced his own resignation on Monday. More than half a dozen other researchers have also left in recent weeks, the Financial Times reported, citing social media posts and people familiar with the matter.
Half the team that built xAI's technical core is gone. And the departures extend well beyond the founding group.
The Breakdown
• Jimmy Ba and Tony Wu became the fifth and sixth cofounders to leave xAI, departing within 48 hours of each other.
• More than half a dozen other researchers have also left in recent weeks, the Financial Times reported.
• Staff complained that leadership overpromised to Musk on technical developments; MacroHard, xAI's coding product, has fallen short of expectations.
• xAI burned $7.8 billion in nine months of 2025; SpaceX acquired it in a $1.25 trillion all-stock merger earlier this month.
Six gone in under three years
Of the twelve cofounders who launched xAI in 2023, six remain. Kyle Kosic left in 2024 to join OpenAI. Christian Szegedy departed that same year for Morph Labs. Igor Babuschkin resigned last August to start a venture firm focused on AI safety. Greg Yang stepped back last month after a Lyme disease diagnosis. Wu and Ba brought the total to six departures in under three years.
That attrition rate puts xAI in company it would rather avoid. OpenAI has lost eight of its eleven original cofounders. Thinking Machines, launched by former OpenAI CEO Mira Murati, already shed three of six. Anthropic, alone among the major AI labs, has retained all seven of its founders. But Musk's startup is losing its founding team faster than any of them relative to its age.
Inside the exits
Neither departure came out of nowhere.
Ba ran a large portion of xAI's operations until late last year, when several of his responsibilities were split between Wu and cofounder Guodong Zhang, Business Insider reported. The team overseeing more than a thousand AI tutors, which Ba had also led, was handed to Diego Pasini in September. Ba was credited for research that influenced xAI's Grok version 4 models, CNBC reported. A PhD student of Nobel laureate Geoffrey Hinton, he was among the most credentialed researchers on xAI's team. By the time he walked, the company had already built around him.
"It's time to recalibrate my gradient on the big picture," Ba wrote on X. "2026 is gonna be insane and likely the busiest (and most consequential) year for the future of our species."
Wu's exit followed the same pattern. xAI underwent a reorganization several weeks before his departure. Zhang, who had been running pre-training, took over post-training as well, absorbing portions of the company that had previously reported to Wu. The shift removed Wu from the technical hierarchy he had helped build. His Slack access was cut on Monday, Business Insider confirmed.
"I resigned from xAI today. This company, and the family we became, will stay with me forever," Wu wrote. He thanked Musk for "the ride of a lifetime" and hinted at something new. "A small team armed with AIs can move mountains."
Restructure, redistribute responsibilities, departure. Both cofounders saw their roles hollowed out before they left.
Overpromises and underperformance
The internal pressure went beyond organizational reshuffling.
Some staff have complained that xAI's leadership overpromised to Musk on technical developments, creating demands they could not meet, the Financial Times reported. Musk has been reviewing the performance of leadership and restructuring departments, believing some were underperforming.
MacroHard, xAI's agents and coding project, has fallen particularly short of expectations. The system competes directly with OpenAI's Codex and Anthropic's Claude Code. "I'd be surprised if by the end of this year, the digital human emulation has not been solved," Musk told the Dwarkesh Podcast last week. "I guess that's what we sort of mean by the MacroHard project. Can you do anything that a human with access to a computer could do?"
The company's AI companions have also missed targets. Its anime character Ani, which can engage in erotic conversations with users, has not delivered the engagement Musk expected. He has been frustrated by the lack of growth in time spent with these companions despite new characters and resources dedicated to the products, two people told the FT.
Manuel Kroiss, cofounder and former Google DeepMind engineer, has been promoted to help run coding operations. But promotions for the people who stay don't address the core problem: the people who built xAI's technical foundation keep deciding this is not where they want to be.
The $7.8 billion question
xAI's cash burn rate explains part of why SpaceX swallowed it.
The AI startup lost $1.46 billion in the quarter ending September 2025 against just $107 million in revenue, according to documents reviewed by CNBC. Over the first nine months of that year, xAI burned through $7.8 billion on data centers and chips. Monthly losses approached a billion dollars.
SpaceX, by contrast, generated roughly eight billion dollars in profit on an estimated $15 to $16 billion in revenue last year. The merger, which CNBC called the largest of all time, put SpaceX at a $1 trillion valuation and xAI at $250 billion. Analysts have called the transaction a bailout dressed up as a deal.
Musk solved the funding problem through absorption. He merged xAI into X last March, then merged both into SpaceX this month. Without SpaceX's profitable revenue stream propping it up, xAI's cash reserves would have been gone within months.
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Why the founders leave
Igor Babuschkin's departure last August offered the most candid window into what is driving xAI's founding team away.
Babuschkin came from Google DeepMind and helped build xAI's training infrastructure from scratch. "Through blood sweat and tears, our team's blistering velocity built the Memphis supercluster, and shipped frontier models faster than any company in history," he wrote in his farewell. Then he went in a different direction entirely, saying he had grown concerned about AI approaching superintelligence. He left to start a fund focused on safe AI development.
Musk's reply was four words long. "Thanks for helping build @xAI!"
Kosic went straight to OpenAI. Szegedy went to Morph Labs. Yang cited illness. Wu cited his "next chapter." Ba wants to "recalibrate." Each departure carried a different stated logic. But cofounder attrition at this scale, six of twelve in under three years, points to something structural. The people closest to xAI's technical core keep deciding this is not where they want to be.
Grok's regulatory reckoning
The departures coincide with xAI's worst stretch of regulatory exposure.
Paris prosecutors raided the French offices of X last week. Europol and French national police participated. The criminal investigation covers allegations including complicity in spreading child sexual abuse material and unlawful data extraction. Both Musk and former X CEO Linda Yaccarino have been summoned to hearings in April.
Grok, xAI's chatbot, sits at the center. The European Commission opened a formal Digital Services Act investigation on January 26 into whether X properly assessed risks around Grok's image generation capabilities across the EU's 27 member states. Violations could cost X up to 6% of its global revenue. In the U.K., the Information Commissioner's Office launched a separate probe. India and the EU began investigations last month after Grok's image generator was found producing nonconsensual explicit deepfakes, including of minors.
The trust problems started before the deepfakes. Grok spread fabricated posts about racial violence in South Africa back in May 2025. xAI's explanation? An "unauthorized modification" to the chatbot's system prompts. Then in July, a code update produced antisemitic content on X, including posts praising Adolf Hitler. xAI pulled back Grok's image generation after the backlash. By then, regulators in multiple countries were already building cases.
What six cofounders inherit
The exodus extends beyond the founding team.
General counsel Robert Keele, CFO Mike Liberatore, head of product engineering Haofei Wang, and X CEO Linda Yaccarino have all departed over the past year, the Financial Times reported. Yaccarino has not been replaced. Tesla VP Raj Jegannathan, a 13-year veteran, announced his departure on Monday, the same day Wu's resignation hit X. Two Musk companies, two senior exits, same day.
Musk has been introducing new financial leadership. Former Morgan Stanley banker Anthony Armstrong took over as CFO last October. Jonathan Shulkin, formerly a partner at xAI investor Valor Equity Partners, was appointed chief revenue officer. Armstrong and Shulkin are still learning the building while the IPO prospectus gets drafted.
Musk himself is stretched across Tesla, SpaceX, xAI, X, Neuralink, the Boring Company, and a federal advisory role. That workload was already a running joke before he started merging his companies into each other. The executives who actually run the day-to-day keep quitting.
Tesla's car revenue fell 3% last year, the company's first annual drop on record. Q4 was worse: sales down 16% year over year. BYD passed Tesla globally for the first time. Musk killed the Model X and Model S last month.
Back at xAI, six cofounders remain, including Musk himself, though how much time the CEO of Tesla and SpaceX spends on AI model development is an open question. Zhang has consolidated technical authority after absorbing both Ba's and Wu's teams. Kroiss, Zihang Dai, Toby Pohlen, and Ross Nordeen now carry a company valued at $250 billion inside a newly merged entity preparing for a public offering.
SpaceX's IPO, targeted for as early as this summer, adds a clock. Investors buying into a $1.5 trillion public offering will be buying xAI's burn rate alongside SpaceX's profitable rocket business. Whether the remaining founders can ship competitive products against OpenAI and Google, satisfy regulators on three continents, and stabilize a company that has lost half its founding team, all before that offering, is the question that hangs over the whole operation.
Six cofounders gone. Half a dozen researchers out the door behind them. Criminal investigations in France. Deepfake probes across three continents. Close to a billion dollars a month going out the door. A coding product that isn't keeping up. AI companions nobody is using. And a recruitment post that says "no politics." The engineers reading that post can count.
Frequently Asked Questions
Q: How many xAI cofounders have left the company?
A: Six of twelve original cofounders have departed since xAI's 2023 founding: Kyle Kosic (joined OpenAI), Christian Szegedy (Morph Labs), Igor Babuschkin (AI safety venture fund), Greg Yang (stepped back for health reasons), Tony Wu (resigned Monday), and Jimmy Ba (resigned Tuesday). More than half a dozen other researchers have also left in recent weeks.
Q: Who is Jimmy Ba and why does his departure matter?
A: Ba is a University of Toronto professor who studied under Nobel laureate Geoffrey Hinton. He led research, safety, and enterprise efforts at xAI and reported directly to Musk. He was credited for research that influenced xAI's Grok version 4 models. His departure, combined with Wu's, removes two of the most technically influential cofounders in a single week.
Q: What internal problems are driving departures at xAI?
A: Staff have complained that leadership overpromised to Musk on technical developments, creating unreasonable demands. MacroHard, xAI's agents and coding project, has fallen short of expectations. AI companions like the anime character Ani have not delivered the user engagement Musk wanted. Both Ba and Wu had their responsibilities redistributed before departing.
Q: Why did SpaceX acquire xAI?
A: xAI was burning close to a billion dollars a month. It lost $1.46 billion in one quarter against $107 million in revenue. SpaceX, which cleared about $8 billion in profit last year, absorbed xAI in an all-stock merger valued at $1.25 trillion. Without SpaceX's cash flow propping it up, xAI's reserves would have run dry within months.
Q: When is the SpaceX IPO expected?
A: SpaceX is preparing for a public offering as early as June 2026, which could value the combined SpaceX-xAI entity at $1.5 trillion. But absorbing a company that bleeds close to a billion a month, while half its founders walk and regulators circle, complicates the pitch to public-market investors.
