Elon Musk’s xAI Lays Off Generalists, Shifts Focus to Specialist AI Tutors Amid Restructuring

Elon Musk’s AI startup, xAI, is making headlines again—this time for laying off at least 500 generalist AI tutors while planning to build a new team of specialist AI experts. The company’s move comes as part of a broader restructuring aimed at refining its chatbot, Grok, and stepping up its challenge to major AI players like OpenAI and Google. However, it’s also raising eyebrows about the company’s long-term stability.

The affected employees, part of xAI’s data annotation team, were informed late on a Friday evening via email. These generalist tutors played a crucial role in Grok’s development, helping the chatbot better understand language, tone, and context by carefully categorizing and refining vast amounts of data. Their work, which paid between $35 to $65 per hour, ensured that Grok could respond in ways that felt human, relevant, and even entertaining.

Despite their contributions, employees ...