As Elon Musk’s xAI merges more closely with SpaceX ahead of the space giant’s blockbuster IPO, the AI company is undergoing yet another major overhaul to its engineering team, according to a memo viewed by Business Insider.
SpaceX executive Michael Nicholls said the company is “clearly behind” the competition and is taking action to catch up as quickly as possible.
Nicholls, the senior vice president of Starlink at SpaceX, has taken on the title of xAI president, a person with knowledge of the change told Business Insider.
SpaceX, which acquired xAI earlier this year, is expected to file an initial public offering this year, which could value it at over $2 trillion, according to some reports.
As it merges with SpaceX, xAI has undergone a series of organizational shake-ups while racing to keep pace with AI rivals OpenAI, Anthropic, and Google. The company has lost several cofounders and senior leaders, most recently Ross Nordeen, formerly one of Musk’s closest deputies. Now, Musk is using the Tesla playbook to rebuild the company from the ground up, even as it navigates ongoing departures and layoffs. The stakes couldn’t be higher: xAI is pushing toward an IPO that could value the company in the trillions.
Model training
Devendra Chaplot, a former researcher at Facebook and Thinking Machines Labs, who joined the xAI last month, will lead pre-training, the initial phase in which a model learns general patterns from massive datasets, such as text, images, or code.
Aman Madaan will oversee model factory and tooling, including the infrastructure, data pipelines, and training workflows used to develop and improve AI models. Aditya Gupta will head post-training and reinforcement learning, the final stage in which the model is fine-tuned, aligned with human preferences, and optimized for real-world use cases like chat or coding assistance.
Beibin Li, a former researcher at Microsoft and Meta, will lead post-training for Grok Code. Xuhui Jia, who previously worked at Google DeepMind, along with Yukun Zhu, will lead video and image training.
Product and Infrastructure
The company’s product team will be led by Andrew Milich and Jason Ginsburg. The two engineers joined the company from AI coding giant Cursor in March. The product team will oversee Grok Main, Grok Voice, and Grok Imagine.
Physical infrastructure will be led by Jake Palmer, and compute infrastructure by Daniel Dueri, who is the director of software engineering at SpaceX, according to LinkedIn. Other SpaceX employees have also taken on leadership roles. Matt Monson, the director of Starlink software at SpaceX, will also be leading data at xAI.
On the compute team, the training performance of xAI’s compute is “embarrassingly low,” Nicholls said in the memo, and the company plans to improve it significantly in the next two months.
A spokesperson for xAI did not immediately respond to a request for comment.
Nicholls said in the internal memo that the changes are effective immediately and the company is working on giving staff titles that better describe their work.
Musk first reorganized the company in February, after xAI was acquired by SpaceX. Since January, eight of the engineers who helped found the company alongside Elon Musk have left the company, including cofounders Nordeen, Guodong Zhang, and Manuel Kroiss, who led Grok Code, and Toby Pohlen, who helped lead Macrohard, the company’s computer use agent project.
In the wake of the cofounder departures, the company’s structure has been in a near-constant state of flux, with Musk at times managing dozens of direct reports. Tesla and SpaceX engineers have also come into the company’s Palo Alto office to assist with the changes, people with knowledge of the issue said.
XAI has shed dozens of employees since February, Business Insider previously reported. The company cut portions of its teams working on its video and image generation tool, Grok Imagine, and Macrohard, its AI agent project, earlier this year, Business Insider also previously reported. More recently, the company has cut several members of its recruiting team, according to people with knowledge of the cuts.
In March, Musk said on X that “xAI was not built right first time around, so is being rebuilt from the foundations up.”
He has also said that the company is looking back through old xAI candidates to bring in new people.
“Many talented people over the past few years were declined an offer or even an interview @xAI,” Musk wrote on X.
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