xAI Reorganizes Engineering Team Ahead of SpaceX IPO

xAI is undergoing a major engineering restructuring led by new president Michael Nicolls, SpaceX's senior vice president of Starlink, following SpaceX's acquisition of the AI company in February 2026. Nicolls acknowledged in an internal memo that xAI is clearly behind competitors like OpenAI, Anthropic, and Google, with embarrassingly low compute training performance that the company plans to improve significantly within two months. The reorganization follows significant talent loss, with eight founding engineers and key leaders including deputy Ross Nordeen departing since January 2026, prompting Elon Musk to manage dozens of direct reports while applying Tesla's management playbook to rebuild the company. The restructuring comes as SpaceX prepares for an IPO expected in 2026 that could value the company at over $2 trillion, with SpaceX and Tesla engineers now assisting xAI's transformation.

xAI's organizational restructuring and leadership changes

• ▪Michael Nicolls said in an internal memo that xAI is clearly behind the competition and is taking action to catch up as quickly as possible
• ▪Elon Musk said in March 2026 that xAI was not built right first time around and is being rebuilt from the foundations up
• ▪Michael Nicolls, the senior vice president of Starlink at SpaceX, has taken on the title of xAI president
• ▪Elon Musk first reorganized xAI in February 2026 after xAI was acquired by SpaceX

Departures of cofounders and staff reductions

• ▪Several xAI cofounders left xAI after it was acquired by SpaceX in February 2026
• ▪Eight of the engineers who helped found xAI alongside Elon Musk have left the company since January 2026
• ▪xAI has shed dozens of employees since February 2026
• ▪Toby Pohlen, who helped lead Macrohard at xAI, left the company
• ▪xAI cut portions of its teams working on Grok Imagine earlier in 2026
• ▪Manuel Kroiss, who led Grok Code at xAI, left the company
• ▪Ross Nordeen, formerly one of Elon Musk's closest deputies at xAI, recently left the company

New engineering team structure and leadership appointments

• ▪xAI's product team will oversee Grok Main, Grok Voice, and Grok Imagine
• ▪Andrew Milich and Jason Ginsburg joined xAI from AI coding giant Cursor in March 2026
• ▪Xuhui Jia, who previously worked at Google DeepMind, will lead video and image training at xAI
• ▪Devendra Chaplot, a former researcher at Facebook and Thinking Machines Labs who joined xAI last month, will lead pre-training at xAI
• ▪Beibin Li, a former researcher at Microsoft and Meta, will lead post-training for Grok Code at xAI
• ▪Aditya Gupta will head post-training and reinforcement learning at xAI

SpaceX acquisition and upcoming IPO plans

• ▪SpaceX's initial public offering could value it at over $2 trillion according to some reports
• ▪SpaceX is expected to file an initial public offering in 2026

Perspective of Departing xAI cofounders and engineers

• ▪Eight of xAI's founding engineers departed the company between January 2026 and late March 2026