Business

xAI Lays Off Hundreds of Generalist AI Tutors
By Reuters | 13 Sep, 2025

The move is prelude to a tenfold increase in the specialist AI tutor side amid a shift in its AI training model.

xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration

Elon Musk's xAI has laid off at least 500 workers from its data annotation team, which helps develop the company's Grok chatbot, Business Insider reported on Friday. 

The company notified employees by email on Friday night that it was planning to downsize its team of generalist AI tutors, the report said, citing multiple messages viewed by Business Insider.

Responding to a request for comment, xAI referred to a post on X in which the company said it was hiring for roles across domains and planned to increase its specialist AI tutor team by "10X."

The data annotation team, xAI's largest, teaches Grok to understand the world by contextualizing and categorizing raw data, Business Insider said.

Workers were told that they would be paid through either the end of their contract or November 30 but their access to company systems would be terminated on the day of the layoff notice, the report said.

xAI finance chief Mike Liberatore left the company around the end of July after just a few months on the job, the Wall Street Journal reported this month, citing people familiar with the matter.

Musk launched xAI in 2023 to challenge Big Tech's AI push, accusing industry leaders of excessive censorship and lax safety standards.

(Reporting by Preetika Parashuraman in Bengaluru; Editing by Himani Sarkar and William Mallard)