xAI Laid Off About 10 Employees Last Week, Involving the Grok Model Team

According to a report from The Information, employees of Cursor have begun visiting xAI offices to meet with staff and discuss work-related matters after Musk's company secured an option to acquire Cursor for $60 billion weeks ago. The relationship between the two parties has transitioned from transactional arrangements to actual engagement.

This engagement comes amid accelerated internal adjustments at xAI. Insiders have revealed that xAI laid off about ten employees last week, including those involved in the Grok model team; the research team at xAI was around 200 strong in the fall of last year, but the current number is unconfirmed.

The personnel changes also touch on key positions. Devendra Chaplot, a founding member of Mistral AI and Thinking Machines Lab, joined xAI in March of this year and reported directly to Musk, but left the job about a month later.

This round of adjustments continues the integration pressure that SpaceX has faced since acquiring xAI in February of this year. Reports suggest that the deal has subjected SpaceX to higher losses and increased debt, adding another variable for investors assessing its potential future IPO.

A more significant change stems from the organizational positioning. Musk posted on the X platform on May 7th that xAI would no longer exist as an independent company, but would be restructured as SpaceXAI, an AI product under SpaceX. This also explains the context behind the recent reallocation of resources: xAI announced on Wednesday that Anthropic would take over the entire capacity of the first of xAI's two main data centers within the next month; Cursor can still use a significant number of Nvidia GPUs in the second xAI data center, but the exact scale remains unclear.

The positioning of Cursor becomes a key variable in the integration. xAI has stated that both sides have collaborated on coding AI directions and would provide computation capabilities to Cursor, but The Information reported earlier this week that Cursor remains focused on improving its own models and has no immediate plans to develop new coding models with xAI.