Elon Musk‘s artificial intelligence startup, xAI, has reportedly seen an influx of former Tesla Inc. TSLA employees. This move has sparked controversy, with some accusing Musk of using Tesla as a talent pool for his other ventures.
What Happened: Musk’s xAI has attracted several ex-Tesla employees, particularly after a series of layoffs at the electric vehicle giant, reported Business Insider on Wednesday.
Additionally, at least 18 former Tesla employees have joined Neuralink, another of Musk’s startups, which focuses on researching and manufacturing brain-implantable chips.
This trend has raised concerns among Tesla’s supporters and investors, with some even taking legal action against Musk for allegedly directing AI talent away from Tesla to xAI.
Following Tesla’s mass layoffs earlier this year, many former employees from the Autopilot division transitioned to xAI. These employees were swiftly offered positions at xAI following the layoffs at Tesla, according to the report.
The Autopilot division at Tesla, known for its focus on AI technologies, experienced a significant impact from these layoffs, affecting over 10% of the company’s workforce.
Despite the criticism, Musk has been vocal about the importance of AI for Tesla’s future success. He has even diverted crucial AI chips from Tesla to xAI, a move that has drawn attention, according to CNBC.
Notably, xAI’s workforce mainly consists of AI tutors, many of whom were previously employed by Tesla. These tutors are responsible for labeling data for xAI’s primary product, a chatbot named Grok.
The report notes a surge this year in ex-Tesla employees joining X and xAI, both small companies with around 15 full-time engineers in xAI and about 1,000 employees in social media platform X, compared to Tesla’s massive global workforce of over 100,000.
Tesla and X Corp. did not immediately respond to Benzinga's request for comment.
Why It Matters: Musk’s recent actions with xAI come amid his announcement of working on Tesla’s fourth master plan. This suggests a significant shift in Tesla’s future strategy, potentially impacting the company’s AI talent requirements.
The recent influx of former Tesla employees to xAI comes in the wake of Tesla’s ongoing layoffs, which have been causing low morale among the remaining staff. The layoffs, which began in April, were part of Musk’s plan to trim at least 10% of the workforce due to fundamental issues and a stock slump. The process has been ongoing, with employees anxiously checking their messages daily, uncertain of their job security.
Furthermore, Musk’s xAI has been making headlines for its rapid growth, securing a $24 billion valuation in a recent funding round. The company has also hinted at exciting technology updates and products to be announced soon.
Despite the layoffs, former Tesla AI Manager Paril Jain denied claims that Musk’s capacity to retain talent is eroding. Jain mentioned that he had a productive chat with Musk before leaving and would have stayed longer if not for his vision. This statement came in response to media reports suggesting Tesla’s struggle to retain talent amid executive departures.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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