Elon Musk Reorganises xAI Into Four Core Divisions Amid Co-Founder Exits

Elon Musk has announced a major internal restructuring at xAI following the departure of several co-founders and senior team members. The reorganisation, unveiled during an all-hands meeting streamed publicly on X, is designed to sharpen the company’s focus and accelerate innovation as competition intensifies in the artificial intelligence space.

The restructuring comes at a pivotal time for xAI, which is expanding its computing infrastructure, scaling its AI models, and integrating more deeply with Musk’s broader technology ecosystem.

xAI Reorganised Into Four Core Divisions

Musk told employees that xAI will now operate across four primary focus areas:

• Grok’s chatbot and voice product

• Coding

• The Imagine video product

• Macrohard, an AI software company run by digital agents

Addressing staff, Musk emphasised urgency and speed as the company’s defining priorities.

“What matters is velocity and acceleration,”
“If you are moving faster, you will be the leader.”

He also acknowledged those who recently exited the company, thanking them for their contributions.

Leadership Appointments Across Key Divisions

The restructuring includes clear leadership responsibilities across xAI’s major business units.

Grok Chatbot and Voice Division

Aman Madaan, who joined xAI in 2024, will head the chatbot and voice division. During the meeting, he highlighted the rapid progress of the team, particularly in voice AI development.

“We had nothing, but in six months we developed it from scratch,”

Madaan noted that xAI’s accelerated development was partly driven by competitive pressure from OpenAI’s voice model advancements.

Coding Division

Co-founder Manuel Kroiss will oversee xAI’s coding team, which focuses on AI-assisted programming and software development capabilities.

Video Generation – Imagine Product

Guodong Zhang, another co-founder, will lead xAI’s video generation efforts under the Imagine product, while also contributing to coding initiatives.

Musk underscored the importance of real-time video AI systems, stating:

“Most of the AI computing is gonna be understanding real-time video generation,”
“And we expect to be leaders in that.”

Macrohard – AI Agents Software Company

Toby Pohlen, part of the founding team, will lead Macrohard — a division described as an AI software company powered by digital agents. The name is widely seen as a playful nod to Microsoft Corp.

Musk has previously dubbed an expanded facility “Macroharder,” reinforcing the branding theme.

Co-Founder Departures Mark Turning Point

The restructuring follows the back-to-back exits of Jimmy Ba and Tony Wu, two of the original co-founders, along with several other employees who departed in recent days.

Twelve original xAI co-founders, including Musk, launched the company in 2023. Ba and Wu are the fifth and sixth co-founders to exit over the past two years.

Timeline of Co-Founder Exits

• Kyle Kosic left in 2024

• Igor Babuschkin and Christian Szegedy exited in 2025

• Greg Yang stepped back last month after being diagnosed with Lyme disease

The leadership transitions come as xAI navigates rapid growth, heavy capital expenditure, and structural changes.

xAI’s Merger with SpaceX and $1.25 Trillion Valuation

The internal shake-up follows xAI’s recent merger with SpaceX, which reportedly valued the combined company at $1.25 trillion, according to Bloomberg.

This merger could help alleviate xAI’s funding pressures as it continues to burn significant capital on:

• Data centre construction

• Advanced AI computing chips

• Talent acquisition

• Model training infrastructure

Large-scale AI model development requires enormous computing power, and Musk has made infrastructure expansion a central strategy.

Massive Data Centre Expansion in Tennessee and Mississippi

xAI operates a major “Colossus” data centre site in Memphis, Tennessee, and plans a substantial expansion.

The company has already acquired a third building that will increase computing capacity to nearly 2 gigawatts. The expansion, technically across state lines in Mississippi, is expected to include an investment exceeding $20 billion.

The new facility — referred to by Musk as “Macroharder” — will require between 10,000 to 20,000 GB300 systems, according to statements made during the meeting.

This scale places xAI among the largest AI infrastructure builders globally, competing with OpenAI, Google DeepMind, Anthropic, and Meta.

X Platform Sees Strong Growth and Monetisation Gains

Nikita Bier, head of product at X, shared updated platform metrics during the meeting.

According to Bier:

• X and its adjacent apps, including Grok, have reached about 1 billion users

• January was the strongest month ever in engagement

• New users now spend 55% more time per day compared to six months ago

• The platform is generating $1 billion in annual recurring revenue from subscriptions

He added:

“has been rebuilt to be better than ever,”

These figures indicate renewed momentum for X as it pivots toward subscription-driven monetisation and AI integration.

New X Chat App and Financial Services Push

Musk revealed plans to launch a standalone X Chat app for users interested solely in messaging functionality.

He reiterated:

“It’ll be the place where all the money is. It’s going to be a game changer,”

This comment referred to X Money, a long-anticipated in-app payments initiative. The service will soon be available to a limited group of external test users.

Importantly, Musk confirmed that he does not plan to introduce advertisements into Grok, signalling a premium AI product strategy separate from traditional ad models.

xAI Continues Hiring Despite Leadership Changes

Despite the recent departures, executives emphasised that xAI is actively hiring across divisions.

The company is competing aggressively for AI engineers, researchers, and infrastructure specialists at a time when global demand for AI talent remains exceptionally high.

Conclusion

Elon Musk’s restructuring of xAI signals a renewed focus on speed, scale, and vertical integration across chatbot, coding, video AI, and autonomous software agents. While the departure of multiple co-founders raises questions about leadership continuity, the company’s aggressive infrastructure expansion, merger with SpaceX, and ambitious product roadmap indicate long-term strategic confidence.

With a $1.25 trillion combined valuation, multi-gigawatt data centre expansion, and rapid product rollouts including Grok, X Chat, and X Money, xAI is positioning itself as a major force in the next phase of AI competition — particularly in real-time video intelligence and agent-driven software systems.

Whether the restructuring accelerates innovation as Musk intends will depend on execution speed — something he has clearly defined as the ultimate competitive advantage.