Elon Musk is carrying out a major shake-up at his artificial intelligence startup xAI after its Grok coding tools fell behind competitors like OpenAI and Anthropic.

Multiple cofounders have left the company as Musk brings in engineers from Tesla and SpaceX to audit the startup and rebuild its technology. The restructuring also affects the ambitious “Macrohard” project aimed at building AI systems capable of automating entire software companies.

In this episode of The Elon Effect, we break down what’s happening inside xAI, why Grok is struggling to compete in the AI coding race, and how Musk plans to rebuild the company to challenge the leaders in artificial intelligence.