Elon Musk lost his last co-founder and is running from behind in the race for artificial intelligence

According to Business Insider, Ross Nordeen, one of the 11 executives who helped launch xAI in 2023, left the company this week. His departure was confirmed by sources with direct knowledge of the internal movement and also by a detail that is usually followed closely in the Musk ecosystem: Nordeen lost the ID that showed him as an xAI employee on X.

The resignation comes at a delicate time for the company, which is going through a strong internal restructuring promoted by Musk and which, according to the same medium, accelerated after SpaceX absorbiera to xAI in February. The reorganization also coincides with the preparations for an eventual IPO of the space company, an operation that could become one of the most valuable in history if it is carried out under the terms that have been mentioned in the market.

Nordeen was a big name in the xAI scheme. According to Business Insider, he reported directly to Musk and fulfilled the role of operational “right hand”: coordinated priorities, promoted execution and functioned as one of the central links in decision making. He was not a top-level public figure, but he was one of the most trusted men within the company’s internal machinery.

His departure completes a sequence that has become increasingly visible in recent months: xAI has lost at least eight co-founders since January and has been accumulating losses in key positions while trying to rebuild teams, relaunch projects and ccorrect an organizational model that Musk himself recognized as defective.

Nordeen, 36, had followed Musk from Tesla to xAI. Before co-founding the AI ​​startup in 2023, he worked at Tesla as a technical program manager on the Autopilot team and participated in the expansion of data centers for training the Full Self-Driving system, according to a 2021 internal organizational chart cited by Business Insider.

His closeness to the Musk ecosystem was not new. As recalled by the American media, Nordeen is a long-time friend of James Musk, the businessman’s cousin, and was also part of the group of engineers at Tesla y SpaceX who collaborated with Musk on the massive cuts applied to Twitter after the purchase of the social network in 2022.

This journey helps explain why his departure has greater weight than another resignation within the sector. Nordeen wasn’t just another technical co-founder: he was one of the profiles that combined personal confidence, operations experience and direct knowledge of how Musk manages companies in hypergrowth or crisis stages.

Neither xAI nor Nordeen immediately responded to requests for comment sent by Business Insider, according to the outlet itself.

Nordeen’s departure adds to an increasingly long list. Also according to Business Insider, since January several co-founders have left xAI, including Manuel Kroiss, Guodong Zhang, Zihang Dai, Toby Pohlen, Jimmy Ba, Tony Wu and Greg Yang. Kroiss, who led the area of pretraining and also reported directly to Musk, he had left just days before.

The turning point appears to have been the integration with SpaceX and the internal reorganization announced in February. Since then, many of the people in charge that Musk had put in charge of strategic projects, from programming tools to imaging initiatives, ended up leaving the company.

Business Insider’s own previous coverage had already shown that xAI was going through a period of strong turbulence. In mid-March, the media had reported that the startup had been left with only two active co-founders, Nordeen and Kroiss, after other important resignations such as those of Guodong Zhang and Zihang Dai. In parallel, there had also been layoffs and structural changes that affected relevant internal projects.

Those projects include Grok Imagine, the image and video generation tool, and Macrohard, an AI agent project that suffered cutbacks and loss of personnel amid the realignment. The result, according to the media, is a company in permanent movement, with teams that are downsized, rearmed and they change leadership in a matter of weeks.

In this context, Musk had already publicly acknowledged that xAI needs a deep reconstruction. Earlier this month he wrote on X that the company “wasn’t built right the first time” and was being “rebuilt from the ground up.” The phrase served as an unusual admission for a businessman who usually sells expansion, speed and ambition, even in times of crisis.

At the same time, the owner of Tesla and SpaceX also said that the company is reviewing candidates discarded in previous selection processes and is seeking to incorporate new talent. In recent weeks, xAI added nearly a dozen hires, including two senior leaders from Cursor, the company specialized in AI coding tools: Andrew Milich and Jason Ginsberg.

Compensate for the departure of part of the founding team with new profiles and try to accelerate in areas where the company itself recognizes that it is still running from behind. In fact, Musk himself admitted days ago that Grok is lagging behind in programming compared to competitors.

The xAI crisis is not limited to the departure of executives. In parallel, the company was also under pressure due to the controversy surrounding Grok, its artificial intelligence chatbot, after complaints and lawsuits multiplied in recent months for the generation of sexualized images without consent, including some that involved minors. In March, three teenagers from Tennessee sued xAI in California and accused the company of having allowed its tool to be used to create explicit images from real photos of them when they were minors, in a case that points directly to the lack of controls over the system.

The controversy escalated further with a new lawsuit filed by the city of Baltimorewhich accused xAI of distributing millions of sexual deepfakes and generating thousands of images of minors in just 11 days, according to the court filing cited by Reuters. Added to this was a ruling in the Netherlands that ordered the company to stop the creation and dissemination of non-consensual sexualized images of adults and children, under threat of daily fines. The episode became another open front for Musk just as he tries to reorganize xAI and reposition it in the artificial intelligence race.

Despite internal instability, xAI remains one of the best-funded players in the global artificial intelligence race. Business Insider notes that the startup reached a reported valuation close to US$250,000 milliona gigantic figure even by industry standards.

However, the volume of capital alone is not enough to close the gap with the sector leaders. In scale, deployment and scope, xAI still appears behind rivals such as OpenAI and Anthropic, as it tries to consolidate its own products, sustain Grok’s development and organize an internal structure that changed several times in a few months.

The departure of the last original co-founder leaves an uncomfortable picture for Musk: a company valued at hundreds of billions of dollars, with enormous public exposure and almost unlimited resources, but that lost almost the entire group that founded it in just three years.