Elon Musk defends xAI after co‑founder exits and safety team dismantling

Elon Musk has pushed back against criticism after multiple high‑profile departures and reports that xAI’s internal safety organisation was dismantled. About half of xAI’s original 12 co‑founders have left, including Tony Wu and Jimmy Ba, amid a company restructuring and merger with SpaceX that values the group at roughly $1.25 trillion. Former employees told The Verge the safety team is effectively a “dead org” and that Grok — xAI’s chatbot — is being steered toward “unfiltered” and NSFW content, with engineers encouraged to push features to production quickly, sometimes bypassing standard testing. Musk responded on X saying “everyone’s job is safety,” arguing that separate safety departments can be ineffective and pointing to Tesla and SpaceX as examples. Internal tensions and frequent hirings and departures have led some ex‑staff to start their own AI firms (one named Nuraline). xAI’s Memphis Colossus supercluster currently hosts 100,000 Nvidia H100 GPUs and is being expanded to 200,000 GPUs to train Grok 3, which Musk says will surpass competitors. The controversy raises questions about xAI’s safety culture, product priorities, and whether the company is prioritising speed and content permissiveness to catch up with rivals like OpenAI and Anthropic.
Neutral
The news is primarily corporate and governance‑focused rather than directly crypto market moving. xAI’s internal turmoil and safety team cuts raise reputational and product‑risk concerns for Musk’s AI ambitions, which could indirectly influence sentiment toward Musk‑affiliated crypto projects and markets (e.g., volatility around token listings or partnerships). However, there is no direct link to a specific cryptocurrency, token issuance, or crypto infrastructure that would immediately affect prices. Short term: increased headline risk could spur sectorwide volatility in tech and meme assets tied to Musk, causing short, sentiment‑driven swings. Long term: if xAI’s product quality or safety failures materialise, it could harm investor confidence in Musk’s ecosystem and slow adoption of services that might integrate crypto features, producing downside pressure on associated tokens. Conversely, rapid progress on Grok 3 and large GPU scale‑up could be seen as bullish for AI‑crypto infrastructure plays (GPU miners, AI‑oriented tokens) if partnerships or tokenised services emerge. Overall impact on crypto markets is likely muted and indirect, so classify as neutral.