Elon Musk admitted that xAI was not built correctly during its initial development phase, prompting a complete rebuild of the organization’s structure and processes. He emphasized the need to redesign the internal systems to better align with long-term innovation goals and project timelines.

At least seven early co-founders, including Zihang Dai, have left xAI, raising questions about leadership stability and talent retention. This exodus has underscored the challenges of rapidly scaling a new AI venture in a competitive market.

Musk has mobilized resources from Tesla and SpaceX to assist with auditing and operational improvements at xAI. These efforts aim to shore up governance, refine development workflows, and position xAI to compete more effectively with established AI developers.