Musk admits xAI ‘not built right’ — weeks after Tesla invested $2 billion
Elon Musk acknowledged that his AI venture, xAI, was "not built right" and is undergoing a complete rebuild. This admission follows Tesla's $2 billion investment in xAI just six weeks prior, disclosed in its Q4 2025 earnings report. The company has faced significant talent loss, with only two of the original 12 co-founders remaining. The departures have intensified since February 2026, raising concerns about the venture's future viability.
Elon Musk admitted today that xAI, his artificial intelligence venture, “was not built right first time around” and “is being rebuilt from the foundations up.” The admission comes just six weeks after he had Tesla pour $2 billion of shareholder money into the company.
The timing is remarkable. Tesla disclosed the $2 billion xAI investment in its Q4 2025 earnings report on January 28. Days later, SpaceX acquired xAI in a deal valuing the combined entity at $1.25 trillion. Now Musk is telling the world the thing he just sold to his own public and private investors was broken.
10 of 12 xAI co-founders are gone
The “not built right” admission didn’t come out of nowhere. xAI has been hemorrhaging talent at an alarming rate. Of the 12 people who co-founded the company with Musk in 2023, only two — Manuel Kroiss and Ross Nordeen — remain.
The departures accelerated dramatically in February 2026. Jimmy Ba, a University of Toronto professor whose research was critical to Grok’s development, resigned amid reported tensions over demands to improve model performance. Tony Wu left the same week. Igor Babuschkin, Kyle Kosic, Christian Szegedy, Greg Yang, Zihang Dai, Guodong Zhang, and Toby Pohlen have all departed in rapid succession.
