Elon Musk’s xAI Rocked by More Turnover as CFO Steps Down

Another executive bolts from Musk's AI venture—just as the company faces mounting pressure to deliver.

Leadership Exodus Continues

xAI's CFO becomes the latest high-profile departure, following a string of exits that's left industry watchers questioning stability. The financial chief's exit hits particularly hard—nothing says 'growth phase' like your money person heading for the doors.

Timing Couldn't Be Worse

The departure lands amid intensifying competition in the AI space. Rivals are pouring billions into compute and talent while xAI bleeds key staff. Musk's venture now faces skeptical investors and a tightening funding environment.

Another 'Visionary' Runway Extension

Because nothing secures investor confidence like executive turnover—it's not a red flag, it's just 'strategic realignment.' Perfectly normal for a company supposedly revolutionizing artificial intelligence.

General counsel and senior lawyer both left the same month

On August 7, the company’s general counsel, Robert Keele, also exited. He said on X that he was leaving after just over a year to be with his two young kids.

But the post didn’t stop there. He pointed out that “there’s daylight between our worldviews” when talking about working under Elon. Then he dropped an image generated by Grok, the company’s own chatbot, when asked, “what’s it like to lead legal at xAI?” The result was a wild-looking guy in a suit shoveling coal, which Robert included in the post without comment.

That same week, Raghu Rao, a senior lawyer who handled commercial legal matters, also left the company. xAI hasn’t said anything about his exit either. But the timing lined up almost exactly with both Mike and Robert’s departures, which means three top roles were vacated within weeks.

One week later, on August 13, another major name exited. Igor Babuschkin, who co-founded xAI in 2023, said he was leaving to start his own venture capital firm focused on AI safety.

Igor previously worked at DeepMind and OpenAI, two of the most well-known names in the space. He said in his farewell post that “catching up to the frontier this quickly hasn’t been easy.” Elon replied to him on X saying, “We wouldn’t be here without you.”

Grok went rogue and caused public backlash before more resignations

The same month all of these exits happened, Grok, the company’s flagship AI chatbot, created a new wave of trouble. The chatbot is now embedded directly inside X, and it can respond to prompts, generate answers, and create images.

Since xAI and X merged earlier this year, Grok has become central to both platforms. In May 2024, Grok posted unprompted replies about a fake narrative involving “white genocide” of non-Black South Africans, even though the users hadn’t asked about anything related.

Then in July, the chatbot posted multiple antisemitic statements and violent imagery directed at other users. After those incidents, xAI temporarily pulled Grok off the platform and later issued an apology.

According to the engineers, Grok’s behavior changed after the team tweaked its parameters to make it less politically correct. That tweak was what triggered the series of bizarre and offensive outputs. The team didn’t give specifics, but the internal changes clearly did not work as intended.

Shortly after the Grok chaos, Linda Yaccarino, the former CEO of X, also resigned. She had been leading the platform but was demoted after the merger with xAI, which left Elon back in full control. In August, she took on a new role as CEO of eMed Population Health, a private health management company.

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