Elon Musk’s AI startup xAI has cut more than 500 staff members from its data-labeling division, the group responsible for training the company’s Grok chatbot. Employees were informed late Friday evening via email that the firm intended to shrink its workforce of generalist AI trainers, the outlet reported, referencing several internal communications it reviewed, reports Business Insider.
Employees were informed they would continue to receive pay until the close of their contract period or up to November 30, but their system access would be cut off immediately on the day the layoff notices were issued.
“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. This strategic pivot will take effect immediately,” the email read. “As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude.”
Late Friday, xAI announced on X that it was actively recruiting and aimed to expand its group of specialized AI trainers by a factor of ten.
Elon Musk’s xAI Loses CFO Just Months After Appointment:
xAI recently lost another senior figure as chief financial officer Mike Liberatore resigned after serving only a few months, according to a report by The Wall Street Journal. His sudden exit adds to the ongoing turbulence within the young company, which has been striving to establish itself as a serious competitor to OpenAI, Google DeepMind, and Anthropic.
About Mike Liberatore:
Liberatore, who came on board from Airbnb in April, is believed to have left by late July. In his short stint, he was instrumental in securing one of the largest private funding deals in the industry — a combined $5 billion debt package and $5 billion equity raise, with nearly half of the equity backed by SpaceX, another enterprise under Elon Musk. He also directed efforts to broaden the firm’s footprint through the development of new data center operations in Memphis, Tennessee.