Eight of Elon Musk's cofounders have left xAI in under three months, raising uncomfortable questions about the startup's direction just as it hurtles toward a high-stakes public market debut.
Ross Nordeen didn't announce his departure from xAI. He simply lost access to company systems one day and vanished from a sprawling group chat with Elon Musk and hundreds of engineers. Soon after, he posted a photo of a hiking trail with the caption: "Touching some grass."
His quiet exit marks the end of an era at the AI startup. Nordeen, a 36-year-old engineer who had been one of Musk's closest deputies and a key figure in the 2022 Twitter takeover, was the last non-Musk cofounder standing. Now he's gone too, making him the eighth founding member to walk out the door in under three months.
That kind of rapid unravelling at the top of any company would draw attention. But xAI is not just any company. It merged with SpaceX in February, and the combined entity is racing toward a blockbuster IPO that could reshape the tech landscape. The timing of this leadership implosion is, to put it mildly, less than ideal.
Corporate governance experts are not mincing words. Charles Elson, a seasoned voice in the field, told Business Insider that mass departures of founding leadership teams always send a negative signal. His logic is straightforward: if the future looked bright, people would stay. Either they're cashing out because they think the valuation has peaked, or they're leaving because they've lost confidence in the direction. Neither scenario inspires warmth in potential investors.
Musk has been here before, and he'd probably like you to remember that. He has publicly compared the current upheaval at xAI to his retooling of Tesla nearly two decades ago. Back then, he ousted cofounder and CEO Martin Eberhard in 2008, watched Marc Tarpenning depart shortly after, and cycled through two more CEOs before eventually taking the wheel himself. Tesla went from a struggling startup with a few dozen employees to the most valuable car company on the planet.
The difference is that Tesla was building in a relatively open lane. Electric vehicles were a niche curiosity in 2008, and Tesla had years to figure things out before serious competition emerged. xAI has no such luxury. The artificial intelligence market in 2025 is brutally competitive, with OpenAI commanding enormous consumer mindshare and Anthropic carving out strong positioning with enterprise clients. Even Google and Meta are pouring tens of billions into their own AI divisions, creating a landscape where falling behind by even a few months can be terminal.
According to reports, xAI is burning through billions of dollars and struggling to keep pace. Musk has reportedly expressed frustration internally with Grok Imagine, the company's image and video generation tool, as well as the broader product suite. Dozens of employees across key teams have been cut since February, replaced by engineers pulled in from Tesla and SpaceX.
Franco Granda, a senior research analyst at Pitchbook, put it bluntly when he described xAI as a business that is currently hemorrhaging money. Merging that kind of operation with SpaceX ahead of an IPO creates what he called a lot of distractions, precisely when a company wants to present its cleanest face to public market investors.
What This Means for the AI Race
For founders and operators watching from the sidelines, the xAI saga offers a few sharp lessons. First, Musk's cult of personality can only paper over so much. His track record of building world-changing companies is genuine, but replicating the Tesla turnaround in a saturated AI market against well-funded, fast-moving rivals is a fundamentally different challenge. Second, cofounder departures at this scale are rarely just noise. These are people who had equity, visibility, and the chance to build something historic alongside one of the most polarizing figures in technology. They chose to leave.
The SpaceX IPO will eventually price xAI's ambitions into public markets. When it does, investors will have to weigh Musk's undeniable ability to execute against the reality that his current AI venture is losing people and money at an alarming rate. The smart money will be watching who Musk brings in to replace the departed cofounders, and whether those new leaders can ship products that compete with what OpenAI and Anthropic are already putting into the world.
Until then, the most telling detail might be the simplest one: the man Musk trusted to help him seize control of Twitter, the person one colleague called his handler, decided that touching grass was more appealing than staying to finish what they started.
