Elon Musk’s xAI startup reportedly lays off 500 people

SAN FRANCISCO (KRON) — Elon Musk’s artificial intelligence startup, xAI, has reportedly laid off 500 employees. The company, Business Insider is reporting, laid off 500 people on its data annotation team — the people tasked with training the Grok chatbot — on Friday night.

BI reports that the company sent out emails Friday notifying employees it was downsizing its team of “generalist AI tutors.”

“After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles,” read an email cited by Business Insider. “This strategic pivot will take effect immediately. As part of this shift in focus, we will no longer need most generalist AI tutor positions and your employment with xAI will conclude.”

Workers were reportedly informed they would be paid either through the end of their contract, or through Nov. 30. Access to company systems, however, would be terminated immediately.

The xAI layoffs follow the abrupt departure of the startup’s chief financial officer, Mike Liberatore, who left the company in July. Igor Babuschkin, a researcher who partnered with Musk in founding xAI, departed the company the following month.

The layoffs, according to Business Insider, amount to about a third of xAI’s data annotation team.