TL;DR
- Ross Nordeen, the last of xAI’s 11 original cofounders, left the company last Friday.
- Elon Musk has admitted xAI “was not built right” and is rebuilding it from the ground up.
- The exodus comes as Musk prepares SpaceX for what could be the biggest IPO in history.
Ross Nordeen, the last original cofounder still standing at xAI, left the company last Friday, completing a months-long exit of all 11 people who helped Elon Musk found the AI startup in 2023. Nordeen was described internally as Musk’s “right-hand operator” and was the architect of xAI’s data center infrastructure, having joined from Tesla.
His departure came days after Manuel Kroiss, the company’s pretraining team lead, announced his own exit. Of the 11 original cofounders, not one remains.
The xAI cofounder exodus of 2026
The departures accelerated sharply after SpaceX acquired xAI in an all-stock deal on February 2, creating a combined entity valued at $1.25 trillion. Within weeks, Tony Wu, who led the reasoning team, and Jimmy Ba, co-author of the widely cited Adam optimizer paper with over 95,000 citations, both resigned within 24 hours of each other. Prominent researchers including Igor Babuschkin, Greg Yang, and Guodong Zhang had already walked before that.
Musk didn’t mince words about what went wrong. xAI “was not built right the first time around, so is being rebuilt from the foundations up,” he wrote publicly. He also said the company’s AI coding tools “simply did not work.”
To replace the departing talent, xAI brought in two engineers from Cursor, the AI coding startup. Whether a pair of outside hires can fill the gap left by a decade’s worth of combined research experience is an open question.
A tough moment for the SpaceX IPO story
All of this is happening as Musk lines up what could be the largest public offering in history. SpaceX is filing IPO paperwork this week, targeting a valuation between $1.5 trillion and $1.75 trillion, with a June 2026 debut on the table. Musk has also signaled he may reserve 30% of SpaceX shares for retail investors, far above what most listings offer.
Tesla shareholders have added another layer of friction, suing over the company’s $2 billion investment in xAI’s Series E round and questioning whether that deal served Tesla investors or primarily Musk himself.
The public admission that the AI arm of the newly combined company needs to be rebuilt from scratch — made just weeks before a landmark public market debut — is the kind of headline most IPO roadshows try very hard to avoid.