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Musk Says xAI Reorganized, Resulting in Layoffs

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Elon Musk said xAI has undergone a reorganization that resulted in layoffs, as the artificial intelligence company moves to streamline operations during a period of rapid expansion. In a post on X, Musk said the restructuring was aimed at improving execution speed but required “parting ways with some people.”

The changes come shortly after SpaceX announced plans to acquire xAI in a deal that would create a combined entity valued at approximately $1.25 trillion, with ambitions to pursue a public listing later this year. The merger is expected to support Musk’s broader strategy, including plans to deploy large-scale data centers in space.

Leadership shifts have also followed the restructuring. xAI co-founders Tony Wu and Jimmy Ba confirmed their resignations this week, bringing the number of original founders who have left the company to half of its initial twelve.

The reorganization signals a pivotal moment for xAI, which has been scaling its AI models and infrastructure amid intense global competition. The company’s next phase will likely focus on integrating operations with SpaceX while maintaining momentum in the fast-moving AI sector.

SpaceX acquires xAI in record-setting deal as Musk unifies AI and space ambitions

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SpaceX has acquired xAI in a record-setting transaction, consolidating Elon Musk’s artificial intelligence and space businesses into a single platform. The deal, first reported by Reuters, values SpaceX at about $1 trillion and xAI at roughly $250 billion, according to people familiar with the matter, making it the largest merger and acquisition transaction on record.

Under the terms, xAI investors will receive 0.1433 SpaceX shares for each xAI share, with some executives able to opt for cash at $75.46 per share. The combined entity is expected to price shares near $527. The tie-up brings together SpaceX’s launch and satellite capabilities, including Starlink, with xAI’s Grok chatbot and AI development, potentially strengthening plans for data centers and AI services delivered from orbit.

The move further integrates Musk’s businesses as he competes with rivals such as Alphabet, Meta, Amazon, and OpenAI. Analysts say the deal could enhance SpaceX’s narrative ahead of a potential public offering later this year, while also raising governance and regulatory questions given SpaceX’s extensive U.S. government contracts.

Tesla’s Cybercab, Optimus Output to Start ‘Agonizingly Slow,’ Ramp Up Later, Musk Says

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Tesla chief executive Elon Musk said early production of the company’s Cybercab robotaxi and Optimus humanoid robot will be “agonizingly slow” before accelerating significantly as manufacturing matures.

Responding to a post on X, Musk said production speed depends heavily on complexity, noting that output is inversely proportional to the number of new parts and manufacturing steps involved. Because both Cybercab and Optimus rely on largely new designs and processes, early volumes will be limited before scaling rapidly.

Tesla has said it aims to begin volume production of the two-seat Cybercab, which lacks manual controls such as a steering wheel or pedals, in 2026. Output of the Optimus robot is expected to begin toward the end of that year. In December, Musk said Tesla was already testing robotaxis without safety monitors in the front passenger seat.

Much of Tesla’s $1.39 trillion valuation is tied to expectations for self-driving technology and robotics, even as electric vehicles remain the company’s primary source of revenue. Musk has repeatedly described humanoid robots as central to Tesla’s long-term strategy, arguing they could eventually surpass its vehicle business in economic impact.