Billionaire Elon Musk has reorganized his artificial intelligence startup xAI in preparation for a merger with SpaceX and a planned initial public offering later this year, potentially one of the largest IPOs ever. The overhaul follows the recent departure of several co-founders, leaving only six of the original twelve, as Musk positions the company to compete with OpenAI and Google.
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Speaking at an xAI all-hands meeting, Musk explained that the restructuring was necessary to manage the company’s growth. “We’re organizing the company to be more effective at this scale. Now, naturally, when this happens, there’s some people who are better suited for the early stages of a company and less suited for the later stages,” he said.
JUST IN 🚨 Elon Musk wants the Moon first, Mars later.
SpaceX is now pushing to build a self-growing Moonbase city within 10 years.
The big idea: a giant lunar mass driver (electromagnetic railgun) launching thousands of solar-powered AI satellites into deep space at ~2.5 km/s… pic.twitter.com/TlzIVDHv15
— Whale Degen (@hiwhaledegen) February 12, 2026
xAI, founded three years ago, operates the Grok chatbot, which accounts for 3.4% of global generative AI traffic, compared to 64.5% for ChatGPT and 21.5% for Google’s Gemini. The company also develops image and video generation systems and coding tools, aiming to attract top talent with access to a 1 million Nvidia H100 GPU-equivalent cluster and plans for SpaceX-supported orbital data centers.
The startup has been reorganized into four divisions: Grok (model and voice initiatives), coding models and infrastructure, the Imagine team for multimedia, and Macrohard for automating internal processes. Musk highlighted coding as a priority, stating he expects Grok Code to become “state of the art” within months, and suggested AI could eventually generate binaries directly without human coding.
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With the merger and IPO, Musk aims to create a $1.25 trillion AI and space enterprise, blending xAI’s capabilities with SpaceX’s resources to push forward “interstellar ambitions.”