Musk’s xAI Loses Two Co-Founders in Two Days
Synopsis
Elon Musk’s artificial intelligence startup, xAI, is facing a leadership crisis. Two crucial co-founders, Jimmy Ba and Tony Wu, have announced their exits in the last 48 hours. That departure has left the company with less than half of its original founding team still around, just as it prepares to merge with SpaceX for a whopping $1.25 trillion agency-wide contract. As Musk pushes for a summer IPO, the company is working to quash internal strife around model performance and manage international legal inquiries into its Grok chatbot’s involvement in creating deepfakes.
Elon Musk’s artificial intelligence company, xAI, is experiencing an unexpected leadership crisis after its second co-founder stepped down in 48 hours. The researcher Jimmy Ba revealed his departure on Tuesday, February 10th 2026 and is the most recent of a growing string of defections that have seen half of its original founding members leave. Ba’s exit is the second sudden departure of one of Luckin’s co-founders in recent days and leaves the ambitious startup in a precarious situation as it gears up for what could be one of China’s most high-profile stock market debuts.
The news of the departure comes at a particularly sensitive time for the billionaire and his empire. Earlier this month, xAI was officially consumed by Musk’s space behemoth SpaceX in a record-shattering merger valuing the entire mothership at $1.25 trillion. The fusion was supposed to fix xAI’s problem of burning too much money at a time when computing power has never been more in demand, to build orbital data centres, but the sudden exits raise serious concerns about the coherence and stability of what’s happening inside.
Internal Tensions and “Impossible” Deadlines
And though both Ba and Wu issued polite goodbyes on social media, industry reports have painted a decidedly bleaker picture behind the scenes. Earlier this year, a highly regarded University of Toronto professor, Jimmy Ba, left with his team following heated arguments over technical goals, the sources tell WIRED. The rush is partly driven by Musk himself, who has been urging his researchers to catch up with competitors like OpenAI and Anthropic at a pace that many others in the lab describe as “unreasonable,” according to workers involved.
Pressure to deliver has been heightened by the launch of Grok 4.0 recently, reports IEEE Spectrum, which missed some high-speed benchmarks Musk had touted in an update to investors. In addition, the company’s forays in developing “AI companions” are said to be faltering as well in that it has apparently not been getting the user engagement Musk desired. This in turn has culminated in a massive shake-up which has involved Musk himself personally assessing and “weeding out” employees who he feels are not pulling their weight.
Global Probes into Grok Deepfakes
The leadership exodus isn’t the only fire Musk is burning. xAI is currently the subject of significant regulatory probes in the U.S., Europe, and Asia. The investigations came about after the company’s chatbot, Grok, was used to create millions of nonconsensual nude images of real people, including world leaders and children.
Regulators in the UK and France have made some secret raids on offices, issuing subpoenas for evidence that researchers believe might show xAI and X failed to design adequate safety guards into their AI models. The scandal has resulted in several huge class-action lawsuits, and Musk’s ‘free speech’ model for AI is on trial as some critics insist he helped to build yet another digital weapon of harassment. These legal headaches, in turn, may complicate the impending SpaceX IPO which is allegedly slated for early summer 2026.
The Shrinking Founding Team
And when xAI came out in 2023, Musk called up some of the best scientists on the planet and hand-selected this group to help him literally understand the true nature of the universe. Today, there are just six of those original 12 left.
The list of departures includes:
- Tony Wu: Former top Google researcher who ran the Reasoning team.
- Jimmy Ba: Pioneering researcher of the Adam and LayerNorm technologies found in nearly all modern AI.
- Igor Babuschkin & Christian Szegedy: They left the company last year to work on their own startups.
- Kyle Kosic: The first member to depart, in 2024, to work for rival OpenAI.
- Greg Yang: Took leave last month because of a health struggle with Lyme disease.
Although Musk has been promoting younger engineers, such as Manuel Kroiss to members of the team to replace their knowledge, losing these founding fathers type figures in AI is a major blow. Now, as it prepares to sell itself to public investors, the company will have to show that it can still innovate without the same people who were largely responsible for building its foundation.
Key Highlights
- Jimmy Ba and Tony Wu had both quit xAI on Feb. 20, 2026.
- 6 of the original dozen co-founders have left or stepped back from the firm.
- Last month, xAI was valued at $250 billion in a merger with SpaceX.
- The company is being investigated in multiple countries for its Grok “deepfake” image generator.
- SpaceX intends to go public with a $1.5 trillion I.P.O. in early summer 2026.
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At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
