Half of xAI's Co-Founders Have Left as Internal Exposures Reveal Grok's Crisis

xAI is under pressure from all sides. Seven of its 12 co-founders have departed, and former engineer Benjamin De Kraker's ongoing internal revelations are exposing the reality of its organizational culture. Grok shows a significant gap between self-reported benchmarks and independent tests, and received the worst rating for child safety.

Elon Musk is banking on the SpaceX merger and Cursor talent recruitment for a turnaround, but whether these moves can address the fundamental issues of talent exodus and eroding trust remains to be seen.

De Kraker's Revelations: The Reality Behind the Flat Organization

The story traces back to February 2025. De Kraker, then an xAI engineer, posted feedback on X about improving Grok, only to be told 'never do that again.' When he later posted about Grok 3's coding benchmark rankings, he was ordered to delete it, and ultimately chose to resign.

Additional revelations followed in March 2026. According to De Kraker, xAI is rife with middle managers and office politics, a far cry from the flat organizational structure it claims to embody. The irony of a company operating X, a platform championing free speech, while suppressing its own employees' voices was also highlighted.

Musk responded to these revelations with a simple 'That's weird' on X. No substantive explanation or action followed.

Half the Co-Founders Gone

De Kraker's case is just the tip of the iceberg. According to Fortune, 7 of xAI's 12 co-founders, 58%, have already left the company. Key departures include Christian Szegedy, Igor Babuschkin, Tony Wu, Jimmy Ba, Toby Pohlen, and Greg Yang.

The reasons for leaving are multifaceted: a culture that dismisses AI safety, extreme overwork, and frequent priority shifts. Greg Yang cited health issues, stating his 'immune system was weakened.' De Kraker described it as 'the cost of a culture that competes over who is more exhausted.'

Senior talent attrition is also severe. Kyle Kosic and others have moved to OpenAI. Musk attempted to frame the mass departure as 'natural organizational evolution,' but industry observers remain largely unconvinced.

Grok: The Reality Behind the Benchmarks

Beyond personnel issues, Grok's actual performance is also being questioned. On the SWE-bench coding benchmark, xAI self-reported 72-75%, but independent testing by vals.ai yielded just 58.6%. Claude Opus 4.6 leads at 79.20%, making the gap clear.

Grok 4.1 did perform well on Chatbot Arena with an Elo rating of 1483, ranking first in conversational quality. However, this alone isn't enough. Common Sense Media rated Grok's child safety as 'among the worst,' and the California Attorney General issued a cease-and-desist order. High hallucination rates and reliability issues with X-based sources have been repeatedly flagged.

U.S. market share has grown to 17.8%, but this is largely attributed to X platform bundling. In terms of paid user conversion and enterprise customer acquisition, Grok still significantly trails OpenAI and Anthropic.

Strategic Pivot: SpaceX Merger and Cursor Recruitment

Musk has deployed a bold strategy to break through this crisis. In February 2026, SpaceX acquired xAI, creating a combined entity valued at $1.25 trillion. Musk's vision of merging rocket technology with AI is now taking concrete shape.

Talent recruitment to shore up coding AI competitiveness has followed. In March 2026, xAI hired two senior leaders from Cursor: Andrew Milich and Jason Ginsberg. The intent is to absorb the coding-focused AI expertise that Cursor has built.

Meanwhile, Sulaiman Ghori revealed an intriguing detail on a podcast: xAI is rebuilding core APIs using 20 AI agents, and there was even an incident where an employee mistook an AI virtual employee for a real team member. While fitting for an AI company, juxtaposed with the mass human talent exodus, it paints a peculiar picture.

Ultimately, xAI's future hinges on the tug-of-war between talent departure and talent acquisition. Whether SpaceX's resources and Cursor alumni can stabilize the organization, or whether the core talent drain continues, will determine xAI's trajectory.