Elon Musk loses half of xAI founding team ahead of historic trillion dollar IPO

The foundational stability of Elon Musk’s artificial intelligence empire is fracturing just as he attempts to engineer the largest public offering in history. In a staggering 48-hour window, xAI co-founders Jimmy Ba and Tony Wu announced their resignations, bringing the total exodus to six of the original twelve founding members who launched the startup in 2023. This talent drain arrives only days after xAI was absorbed by SpaceX in a massive all-stock merger valuing the combined entity at $1.25 trillion.

While Musk pitches a future of space-based AI data centers, the company’s current books reveal a brutal financial reality: xAI burned through $7.8 billion in cash over the first nine months of 2025, against just $107 million in quarterly revenue. The departure of Ba, a University of Toronto professor, and Wu, who led the reasoning division, suggests a growing rift between the company’s technical architects and its commercial velocity. Writing on X, Ba stated, "It’s time to recalibrate my gradient on the big picture," a sentiment echoing the frustration of five other co-founders who have exited since 2024.

The "brain drain" is not limited to the executive suite. Within the past week, at least nine senior engineers, including key architects of the Grok 5 model, have publicly confirmed their exits. This hollows out the technical core at a pivotal moment; SpaceX is reportedly aiming for a June 2026 IPO with a target to raise $50 billion, surpassing Saudi Aramco’s 2019 record for the largest public debut ever.

Investors are now forced to weigh the company's ambitious orbital supercomputer projects against a leadership team that is essentially being rebuilt on the fly. Musk has historically dismissed such turnover, famously claiming he previously put "too much weight on someone’s talent and not enough on their personality," yet the loss of 50% of his founding "brain trust" in under three years is unprecedented even by his standards. As the June listing approaches, the question is no longer just whether the technology works, but whether anyone is left to manage it.