Executive Exodus Continues as xAI Merges with SpaceX Amid Growing AI Controversy
Key Points
- Multiple senior executives leave xAI, including general counsel, communications heads, product engineering lead, and CFO.
- CFO Mike Liberatore departs after 102 days, citing intense workload before joining OpenAI.
- Founder Wu exits shortly after Elon Musk announces the merger of xAI with SpaceX.
- Musk describes the merger as enabling orbiting data centers and a future "sentient sun" for universal understanding.
- Critics label the merger a financial engineering move, pairing xAI’s near $1 billion annual losses with SpaceX’s $8 billion profit stream.
- Earlier in the year, Musk merged social media platform X (formerly Twitter) with xAI at a $33 billion valuation, 25 percent lower than his 2022 purchase price.
- xAI faces criticism for Grok’s generation of sexualized images of minors, prompting a California attorney general investigation.
- French police raid xAI’s Paris offices as part of the ongoing scrutiny.
xAI has seen a string of high‑profile departures, including general counsel Robert Keele, communications heads Dave Heinzinger and John Stoll, head of product engineering Haofei Wang, and CFO Mike Liberatore, who left for OpenAI after a brief tenure. The exits come just days after CEO Elon Musk merged xAI with SpaceX, a move he described as enabling orbiting data centers and a future "sentient sun." The merger is also viewed by some as a financial engineering effort. Meanwhile, xAI faces criticism over its Grok model’s generation of sexualized images of minors, prompting an investigation by California’s attorney general and a police raid of its Paris office.
Executive Turnover at xAI
xAI is experiencing a wave of senior‑level resignations. Recent departures include general counsel Robert Keele, communications executives Dave Heinzinger and John Stoll, head of product engineering Haofei Wang, and chief financial officer Mike Liberatore. Liberatore left after just 102 days, describing his workload as "120+ hour weeks" before moving to a role at OpenAI.
Wu's Departure and Company Evolution
The latest exit involves Wu, who helped create xAI in 2023. His departure occurs just days after CEO Elon Musk announced the merger of xAI with SpaceX, signaling a shift from the company's earlier state.
Musk’s Vision for the Merger
Musk framed the merger as a pathway to deploy orbiting data centers and eventually "scale to make a sentient sun to understand the Universe and extend the light of consciousness to the stars." This ambitious language underscores his long‑term vision for integrating artificial intelligence with space capabilities.
Alternative Perspectives on the Deal
Critics view the merger as a financial engineering maneuver, combining xAI’s nearly $1 billion a year in losses with SpaceX’s roughly $8 billion in annual profits. They suggest the combined entity could be more attractive for a future IPO.
Previous Integration of X and xAI
Earlier in the year, Musk integrated the social media platform X (formerly Twitter) into a unified entity with xAI. At the time of that deal, X was valued at $33 billion, which was 25 percent less than the price Musk paid for the social network in 2022.
Controversy Over Grok’s Outputs
xAI has recently faced criticism over its Grok model’s ability to generate sexualized images of minors. This issue has attracted the attention of California’s attorney general, leading to an official investigation.
Police Raid in Paris
In addition to the California probe, French police conducted a raid on xAI’s Paris offices as part of the broader scrutiny surrounding the Grok controversy.
Implications for the Company
The combination of executive departures, a high‑profile merger, and mounting legal challenges creates a complex environment for xAI. Stakeholders are watching closely to see how the company navigates these intertwined operational and reputational pressures.