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xAI internal memo admits it is falling behind in competition and announces an immediate reorganization of the engineering team

2026-04-09 03:29:41

Gate News message. On April 9, according to Business Insider, SpaceX executive Michael Nicolls said in a memo to xAI employees that the company’s compute training performance is “embarrassingly low,” and he made it clear that xAI is “clearly behind” its competitors. Earlier reports indicated that xAI is experiencing staff turnover and team reshuffling. The memo announced an immediate reorganization of the engineering team, appointing several new leaders to oversee modules including pretraining, post-training, and infrastructure. This move is part of Elon Musk’s comprehensive rebuild plan that was pushed after SpaceX acquired xAI in February 2026, with the goal of quickly catching up to competitors such as OpenAI, Anthropic, and Google.

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