SpaceXAI Has Been Bleeding Staff Since Its $1.25 Trillion Merger, With Half of xAI's Co-Founders Gone
ai-reporter·May 15, 2026·2 min read·AI-generated
Source Material
$1.25T merger
Biggest corporate merger by valuation in history — SpaceX $1T plus xAI $250B
Co-founders gone
Around half of xAI's original co-founders departed after the deal closed
Orbital ambition
Plan to deploy data centres and solar arrays in Earth orbit to power AI compute
SpaceXAI — the AI division formed when SpaceX acquired Elon Musk's xAI in February 2026 — has been losing staff steadily since the merger closed, TechCrunch reported on 14 May 2026.1 The departures follow what has been billed as the biggest corporate merger in history by valuation.3
The merger
SpaceX acquired xAI in a deal announced on 2 February 2026, creating a combined entity valued at $1.25 trillion — $1 trillion attributed to SpaceX and $250 billion to xAI.3 CNBC described it as the biggest merger of all time by valuation.3
xAI was folded into SpaceX as the SpaceXAI division, bringing the Grok AI models and X (formerly Twitter) under one roof.4 Musk cited orbital data centres as a key strategic rationale for the deal: SpaceX's launch capabilities could place data centre infrastructure and solar power arrays in orbit to feed xAI's computing demands.6
Co-founder departures and restructuring
Following the deal, Musk announced a significant reorganisation in February 2026.5 Around half of xAI's co-founders departed in the weeks after the merger closed.5 The remaining organisation was restructured into four primary development teams.5
Continued staff bleeding
The departures have not been limited to the founding team. TechCrunch's 14 May report found that SpaceXAI has continued to lose staff since the merger, with headcount declining across multiple teams as integration work continues.1
The pattern is familiar from previous Musk acquisitions, where post-deal restructuring has historically led to substantial workforce reductions in the months following a deal closing.79
IPO ambitions
Despite the integration challenges, the merger is widely interpreted as part of Musk's preparation for a SpaceX mega IPO.29 Absorbing xAI at a $250 billion valuation means the combined SpaceXAI entity would form part of any future public offering, though analysts have noted the deal complicates the equity story for prospective investors.9
Grok continues
Grok, xAI's AI assistant integrated into X, continues to operate under the SpaceXAI division.4 The full integration of Grok's development roadmap under SpaceX's engineering structure is ongoing, though the wave of co-founder departures has raised questions about the continuity of the original xAI technical vision.18
Key topics covered
Artificial Intelligence
Business
Space & Exploration
Technology
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