Elon Musk’s artificial intelligence startup xAI was shaken by the departure of co-founder Igor Babuschkin. On August 15, 2025, Babuschkin announced on the X platform that this was his last day at the company, which he co-founded with Musk in 2023. Babuschkin led the engineering teams at xAI and quickly transformed the company into one of Silicon Valley’s leading AI model developers.

Musk’s xAI company is falling apart

Babuschkin stated that he still remembers the first time he met Musk, and that they spent hours discussing artificial intelligence and its future. He stated that they both felt the need for a new AI company with a distinct mission, and announced that he has established his own venture capital firm, Babuschkin Ventures.

Babuschkin Ventures is reportedly focused on AI safety and human progress. Following Babuschkin’s departure, Musk told him, “Thank you for helping build xAI! We wouldn’t have gotten this far without you.”

Before founding xAI, Babuschkin was part of the research team at Google DeepMind working on AlphaStar. AlphaStar was an AI system that defeated top players in the video game StarCraft in 2019. Babuschkin also served as a researcher at OpenAI before the launch of ChatGPT.

Babuschkin’s departure follows a turbulent few months for xAI. The company’s AI chatbot, Grok, has been in the news for its responses to controversial questions. Grok referenced Musk’s personal views, made anti-Semitic remarks, and called himself “Mechahitler.” Finally, a feature added to Grok that allowed users to create AI-generated nude videos of celebrities sparked backlash.

All these scandals have occasionally overshadowed the performance of xAI models. The company’s models are leading in many benchmarks when compared to models from OpenAI, Google DeepMind, and Anthropic.