Elon Musk Has Focused on xAI Since Leaving Washington

In a rare companywide meeting on Wednesday, Elon Musk laid out his vision for xAI, his two-year-old start-up that is chasing its competitors in the race to build artificial intelligence.

Using the lofty language that has typified Mr. Musk’s A.I. dreams for more than a decade, he told employees that he wanted to build systems that were “maximally truth-seeking” while previewing plans to build a Microsoft competitor called Macrohard.

“We are the only company where the mission is truth,” Mr. Musk told his workers as part of an hour-and-a-half presentation that was listened to by The New York Times. “If you force the A.I. to lie or believe things that are not true, you’re at great risk of creating a dystopian future.”

Since his falling out with President Trump in June, Mr. Musk, 54, has redoubled his efforts with xAI, which makes the Grok chatbot and was recently valued at $120 billion. He has deemed government a hopeless problem, but he believes A.I. will revolutionize society. And he insists xAI can build technology that will eventually help his other businesses, like the electric carmaker Tesla and the rocket company SpaceX.

Over the summer, Mr. Musk spent most of his time at xAI’s offices in Palo Alto, Calif., working in frantic all-day spurts that sometimes stretched into the next day, according to three people with knowledge of the company’s operations who spoke on the condition of anonymity. Occasionally, as he has with his other companies over the years, he has slept at the office.

Mr. Musk’s focus on xAI raises questions about how much time he is spending at his other companies, and comes as Tesla’s board of directors has been pushing to give him a trillion-dollar pay package, which they say will motivate him to improve the car maker’s performance. On Monday, Mr. Musk posted on X, “Daddy is very much home,” and detailed his schedule, which included 12 hours of meetings at Tesla and a visit to xAI’s data center.

Despite Mr. Musk’s focus on xAI — or perhaps because of it — the A.I. company had a tumultuous summer, according to interviews with 12 people familiar with the company’s operations. Those people, along with Mr. Musk’s presentation on Wednesday, offered a detailed look at where the billionaire has been focused since giving up his cost-cutting crusade in Washington.

Mr. Musk has reorganized xAI on the fly. He has led an aggressive recruiting drive for engineers. And he has pushed out a flurry of prominent researchers, even as others have left because they thought xAI had abandoned science in favor of attention-grabbing products, like a chatbot that sometimes produced offensive material and flirty A.I. chat companions, according to two people with knowledge of the company who spoke on the condition of anonymity.

At the same time, xAI is spending billions of dollars on technology while it is not clear how much money it is bringing in. Mr. Musk and his executives said on Wednesday that Grok, xAI’s chatbot, now has 64 million monthly users, one company leader said during the meeting. ChatGPT attracts roughly 700 million weekly users for OpenAI. Mr. Musk also made heady predictions that xAI’s product would help quintuple advertising revenue to $10 billion a year at X, his social media platform.

Mr. Musk founded xAI in the spring of 2023, alongside Igor Babuschkin, who had previously worked at OpenAI and Google DeepMind, two of the world’s leading research labs. Mr. Musk hired Ross Nordeen, one of his most trusted lieutenants, who previously worked at Tesla and X. Mr. Babuschkin corralled the rest of the team, including Jimmy Ba, a professor at the University of Toronto, and a young Google researcher named Tony Wu.

Long before Meta started throwing around giant pay packages for A.I. expertise, Mr. Musk attracted many of his researchers with pay packages totaling millions of dollars a year, according to two people familiar with the company’s early recruiting efforts who spoke on the condition of anonymity.

In May, Mr. Musk told more than 100 employees in a group chat that Grok was too woke, according to three people familiar with the discussion.

Later that night, an engineer changed Grok’s code in response. The change caused Grok to begin bringing up South African politics when answering completely unrelated questions on X. It falsely insisted, for example, that the country was engaging in “genocide” against white citizens. Grok’s responses set off an internal scramble to fix the mistake and the company later blamed the incident on an “unauthorized modification” by an employee without mentioning Mr. Musk’s initial message.

In early June, the weekend after receiving a send-off from Mr. Trump, Mr. Musk traveled to a luxury resort in Montana for Symposium, an exclusive gathering for tech entrepreneurs hosted by the venture capital firm Founders Fund.

Mr. Musk avoided most of the other guests, including his archrival Sam Altman, chief executive of OpenAI, according to three people familiar with the event. But he spoke for hours with a small group, including the leader of Founders Fund, Peter Thiel, and focused mostly on the future of artificial intelligence.

Shortly after, Mr. Musk traveled to xAI, and seized control from the two researchers he had tapped to run its day-to-day operations, according to a person familiar with the changes. He pushed out Ting Chen, who led the team working to train Grok with images and sounds, and then dismissed Aakash Sastry, who oversaw A.I. that could generate videos. He also removed some duties from Dr. Ba, one of the first employees of the company, and Mr. Babuskin moved into a role without management responsibilities.

Mr. Musk put Mr. Nordeen and Dr. Wu in charge of the company’s products. They attempted to make Grok’s responses edgier, aiming to draw more attention so the chatbot would go viral on X.

The result was another embarrassment. In July, after a code update, Grok spewed antisemitic remarks, praising Adolf Hitler and suggesting that people with Jewish surnames were more likely to spread online hate. The chatbot referred to itself as “MechaHitler.” Company engineers changed the code to prevent that behavior from happening again.

A few weeks later, the company began offering its latest A.I. technology to customers via a $300-a-month service called SuperGrok Heavy, and debuted a pair of cartoonish A.I. bots designed for virtual romance.

The bots frustrated some of the company’s researchers who thought xAI was straying from its scientific mission, according to two people familiar with the situation, and some of them told colleagues they were leaving xAI because of these bots.

“Most A.I. researchers are driven by research. We want to answer big questions,” said Sasha Luccioni, a researcher at the A.I. start-up Hugging Face. “The direction that xAI seems to be taking is less appealing for most A.I. researchers — at least the ones I know.”

At the end of July, Mr. Musk and Mike Liberatore, xAI’s finance chief, raised $10 billion for the company, including an investment from SpaceX, Mr. Musk’s rocket company. But half of these funds are classified as debt that the company must eventually repay.

Two months later, Mr. Liberatore left company and was hired by the rival OpenAI for a finance role. Over the summer, xAI also parted ways with Mr. Babushkin, its general counsel and other key employees. Several prominent researchers have left for rivals like Meta and OpenAI.

“I’ve never seen anything crazier than A.I. recruiting,” Mr. Musk said during Wednesday’s meeting. One human resources manager also spoke about referral bonuses for existing employees, offering employees bonuses of 5 percent of their salary for every new hire, as well as a competition for prizes including a chance to watch a SpaceX launch on a personal tour that included private jet flights.

Mr. Musk did not discuss the company’s revenues. But he reiterated his commitment to creating a competitor to Microsoft cheekily called “Macrohard” that would use Grok to create software as well as an A.I. product for children ages 2 to 12 called “Baby Grok.”

Mr. Musk and his employees also emphasized the importance of xAI’s connections to the billionaire’s other companies, noting that Grok was already powering the voice of Tesla’s Optimus humanoid robots, which are being developed to handle work inside factories and other businesses.

Recently, he has publicly supported a Tesla shareholder proposal calling on the electric carmaker to invest in his A.I. start-up. Shareholders are scheduled to vote on the proposal in early November.

On Wednesday, Mr. Musk added that Tesla’s offices were just a short walk away.

“The reason xAI is here is because Tesla is right across the road,” he said. “My prediction is: Optimus will be more productive than the entire global economy. That the output of goods and services from Optimus will far exceed the global economy, of everyone on Earth.”