Elon Musk's artificial intelligence company xAI is facing a critical leadership transition just as its parent company SpaceX prepares to go public in what could become the largest initial public offering in history. The departure of xAI's last remaining original co-founder marks a significant organizational change for the AI division, arriving at a pivotal moment when the combined SpaceX-xAI entity is being valued at approximately $1.75 trillion, surpassing Saudi Aramco's previous record IPO valuation of $1.7 trillion from 2019 .

What's Happening Inside xAI Right Now?

xAI, founded by Elon Musk in 2023 as a wholly owned subsidiary of SpaceX, has experienced a significant leadership change in recent weeks. The departure of the company's last original co-founder marks a critical turning point for the organization, which was already facing challenges related to its flagship product, Grok . The timing is particularly notable given that xAI was recently merged into SpaceX's corporate structure, a move designed to position the combined entity at the intersection of space technology and artificial intelligence .

The company has faced public relations challenges, including lawsuits alleging that Grok generated sexually explicit images without consent, including images of minors. Musk stated that the AI system is being "rebuilt from the foundations up" to address these issues . These challenges have contributed to xAI's negative community sentiment, which currently sits at negative 13 percent, compared to positive 69 percent for competitor Notion .

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How Does xAI's Performance Compare to Competitors?

Real-time tracking data reveals a mixed picture of xAI's operational momentum. According to real-time activity metrics, xAI logged 7 events in the past week compared to Notion's 20 events . However, over the past 30 days, the gap narrows significantly, with xAI recording 64 events versus Notion's 65 events, suggesting the weekly disparity may be temporary rather than indicative of sustained slower development velocity .

xAI's hype gap of 0.6 indicates the company delivers on its promises with marketing claims closely matching actual capabilities, a positive signal in terms of authenticity . However, this is offset by negative community sentiment of negative 13 percent, suggesting users are dissatisfied with current performance despite accurate marketing. In the broader competitive landscape, xAI currently ranks number 11 among more than 2,800 tracked AI companies, nine positions ahead of Notion at number 20 .

Steps to Understanding the SpaceX IPO's Scale and Structure

• Valuation Target: SpaceX is targeting a valuation of $1.75 trillion, which would exceed the previous record set by Saudi Aramco's $1.7 trillion IPO in 2019, making this potentially the largest public offering in history .
• Capital Raising Goals: Elon Musk is hoping to raise approximately $50 billion, though Bloomberg estimates the offering could be closer to $75 billion, significantly exceeding Saudi Aramco's $29 billion raise .
• Banking Consortium: An extensive group of financial institutions is shepherding the IPO, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley, among others .
• Retail Investor Access: As much as 30 percent of the IPO is expected to be available to retail investors, though Musk will retain voting control through dual-class stock structures .
• Timeline and Briefings: SpaceX is preparing investors through analyst briefings, including an analyst day scheduled for April 21 and further meetings with banks in early May, with analysts expected to receive detailed insight into xAI's operations .

The IPO represents a watershed moment for the commercialization of space. SpaceX has become the dominant force in the global launch market, conducting more rocket launches annually than any other company. The company launched a rocket every other day in 2025 and has deployed 10,000 Starlink satellites into orbit, generating $8 billion in revenue from Starlink alone in 2024 . Bloomberg estimates that SpaceX will earn around $20 billion in 2026 .

Why Does xAI's Stability Matter to Investors?

The integration of xAI into SpaceX was meant to create synergies between space infrastructure and artificial intelligence capabilities. The combined entity positions itself at the intersection of two of the fastest-growing sectors in the global economy, which Wall Street has viewed favorably for years . However, xAI's current trajectory raises questions about whether the company can deliver on its promises to investors.

The leadership departure is particularly significant because it signals organizational change at a critical moment. When an original co-founder departs, it typically indicates either a fundamental disagreement about the company's direction or a loss of confidence in its prospects. For investors considering a $50 to $75 billion IPO, such signals warrant serious scrutiny. The fact that xAI is being "rebuilt from the foundations up" suggests that current problems require substantial remediation .

Beyond its current operations, SpaceX is pursuing ambitious future projects that could justify the massive valuation. These include plans to deploy up to one million satellites designed to function as orbital data centers, establishing a self-sustaining lunar base within the next decade, and beginning construction of a city on Mars within five to seven years . However, development of the next-generation Starship rocket has fallen behind schedule, potentially affecting NASA's confidence in the company for lunar missions .

SpaceX's IPO could still succeed based on the strength of its core space business, which operates at genuine scale and profitability. However, the xAI component, which was supposed to enhance the offering's appeal to growth-focused investors, now represents a potential area of concern. The coming weeks will reveal whether the leadership changes and Grok's reputational challenges will meaningfully impact investor appetite for what could otherwise be the largest IPO in history.