Anthony Armstrong, the former Morgan Stanley banker Elon Musk appointed as xAI’s chief financial officer in October, has departed the company, The Information reported on Thursday, citing two people familiar with the matter.
Armstrong’s exit caps a six-month tenure during which xAI underwent its most turbulent period since Musk founded the artificial intelligence startup in 2023.
His departure makes him the latest in a procession of senior figures to leave the company since the start of the year — a period that has seen every one of xAI’s 11 original co-founders walk out.
Over the last twelve months, xAI and X have lost two chief financial officers, a chief executive, a general counsel, all 11 co-founders who launched the company alongside Musk in 2023, and more than a dozen senior engineers and technical leads.
Dozens of additional employees were cut during a broader reorganisation ordered by Musk in February and March.
Reached by text message for comment by The Information, Armstrong responded: ‘This is over.’
From Wall Street to Musk’s Inner Circle
As global head of technology mergers and acquisitions at Morgan Stanley, Armstrong was part of the team Musk hired to facilitate the $44 billion acquisition of Twitter in 2022.
Morgan Stanley provided financing for the deal, and the two grew close as it was hashed out, the Financial Times reported in October, citing people familiar with the matter.
Armstrong subsequently served as a senior adviser to the Office of Personnel Management during Musk’s stint leading the Department of Government Efficiency in the Trump administration.
His appointment as xAI’s CFO came at a moment of acute executive turnover across Musk’s businesses.
Linda Yaccarino, chief executive of X, had resigned in July. xAI’s general counsel Robert Keele and its previous CFO Mike Liberatore also left over the summer.
Liberatore departed after clashing with members of Musk’s inner circle over corporate structure and aggressive financial targets, people with knowledge of the matter told the Financial Times.
He subsequently joined rival OpenAI as finance chief.
Armstrong took on the finance function for both xAI and X, also replacing X’s outgoing CFO Mahmoud Reza Banki, who left after less than a year in the role.
Among his responsibilities was returning X to financial health following an exodus of advertisers after Musk relaxed the platform’s content moderation standards.
Following the SpaceX-xAI merger in February, Armstrong reported to Bret Johnsen, who became finance chief of the combined entity.
All 11 Co-Founders Gone
Armstrong’s departure follows the complete turnover of xAI’s founding team. The exodus accelerated in February after the SpaceX merger closed, triggering a reorganisation that restructured xAI into four primary development teams.
Tony Wu, who led xAI’s reasoning team, announced his departure on February 10. Jimmy Ba, co-founder and research and safety lead, resigned within 24 hours, reportedly amid tensions over demands to improve Grok’s model performance.
Toby Pohlen followed later that month.
In the first two weeks of March, Zihang Dai and Guodong Zhang — who had overseen Grok’s coding agent and image generation tools — both left the company.
Zhang wrote on X that it had been a “wild journey past three years” while expressing excitement about his next chapter. Musk responded to the departures by writing on X that xAI “was not built right first time around, so is being rebuilt from the foundations up.”
The final two co-founders, Manuel Kroiss and Ross Nordeen, departed late last month.
Kroiss had led the pretraining team. Nordeen was described by Business Insider as Musk’s “right-hand operator” who had previously worked at Tesla and helped plan workforce reductions at Twitter after the 2022 acquisition.
Earlier departures had already thinned the founding ranks.
Igor Babuschkin left in August 2025 to launch a venture capital firm focused on AI safety. Kyle Kosic departed in mid-2025 and returned to OpenAI, xAI’s primary commercial rival. Christian Szegedy left in February 2025 and joined Morph Labs as chief scientist.
Broader Staff Cuts
The co-founder departures were accompanied by a wider wave of exits among senior engineers and technical leads.
At least 11 engineers publicly announced their departures in a single week in February, according to TechCrunch.
Among them was Ebby Amir, described as xAI’s first product engineer and a key figure in the launches of Grok 2.0 through 4.0, who announced his last day on approximately March 21.
Hang Gao, who led the Grok Imagine multimodal team, and Vahid Kazemi, a machine learning researcher who told NBC News that working hours at xAI were “crazy” at around 12 hours a day, also left in February.
Shayan Salehian, who worked on product infrastructure and had spent more than seven years across Twitter, X, and xAI, departed in early February to start a new venture.
Roland Gavrilescu, a former xAI engineer, left to co-found Nuraline, a company building AI agents, alongside other former xAI employees.
Multiple news outlets reported that Musk ordered broader job cuts beyond the named departures, with SpaceX and Tesla executives parachuted into xAI to evaluate employees and remove those deemed underperforming. The Financial Times reported that ‘fixers’ from SpaceX and Tesla were conducting the reviews.
Rebuilding Under SpaceX
Musk has framed the overhaul as necessary rather than problematic. At an all-hands meeting in February, he said some employees were “better suited for the early stages of a company and less suited for the later stages,” according to The New York Times.
He later wrote on X that the departures reflected a deliberate reorganisation to “improve speed of execution.”
To fill the leadership vacuum, xAI hired Andrew Milich and Jason Ginsberg from AI coding startup Cursor, where the two had jointly led product engineering.
Tesla AI leader Ashok Elluswamy was redeployed to reboot stalled projects and integrate Grok more closely with Tesla‘s real-world AI systems.
Musk also publicly apologised for past hiring missteps, writing on X: “Many talented people over the past few years were declined an offer or even an interview @xAI.”
He said he and engineering talent lead Baris Akis were reviewing interview records to identify candidates the company had wrongly overlooked.
The rebuild comes as xAI faces pressure on multiple fronts. Musk has acknowledged that the company’s AI coding tools lag behind Claude Code from Anthropic and Codex from OpenAI — products that are seen as the primary near-term revenue generators for AI labs.
xAI also faces regulatory probes in multiple jurisdictions over Grok’s facilitation of non-consensual deepfake imagery.
The Musk Conglomerate
The executive exodus unfolded against the backdrop of a rapid consolidation of Musk’s business empire.
SpaceX acquired xAI on February 2 in an all-stock transaction valued at $1.25 trillion — with SpaceX at $1 trillion and xAI at $250 billion — making it the largest corporate merger by valuation in history.
Tesla disclosed in its fourth-quarter and full-year 2025 earnings release, published the previous week, that it had invested approximately $2 billion to acquire shares of xAI’s preferred stock.
Following the SpaceX acquisition of xAI, that investment was converted into an equity stake in SpaceX, giving Tesla an indirect ownership position in the aerospace company — though Wedbush noted it represents less than 1% of SpaceX’s expected valuation.
The day after Musk confirmed the merger, Wedbush Securities analyst Dan Ives wrote on X that there was a “growing chance that Tesla will eventually be merged in some form into SpaceX/xAI over time.”
Ives said Musk’s AI ecosystem would “focus on Space and Earth together” and that Musk would ‘look to combine forces.”
In a subsequent March research note, Ives put a concrete timeline on the prediction, stating he expects Tesla and SpaceX to merge by 2027 — citing the Tesla stake conversion, a joint Terafab semiconductor facility, and the deepening operational ties between the two companies.
SpaceX is now preparing for a potential initial public offering in mid-2026 that analysts have projected could target a valuation of $1.75 trillion.
