Hoffman Blasts SpaceX AI Push and xAI as 11 Co-Founders Exit

2 articles · Updated · Fortune · Jun 24

Reid Hoffman said SpaceX is “not an AI company” and called xAI a “complete train wreck,” arguing SpaceX’s post-IPO AI push amounts to using its market cap to buy relevance.
June 12’s SpaceX IPO leaned heavily on AI, but Hoffman said the subsequent Cursor acquisition and AI-infrastructure leasing to customers like Anthropic show dependence on deals and compute rentals rather than core model strength.
At xAI, all 11 original co-founders had left by May 2026, and Hoffman said the company was already on its “third restart” as Grok continued to trail Anthropic and OpenAI on benchmarks.
Hoffman also condemned the June 11 U.S. order that forced Anthropic to pull Fable and Mythos, calling the move arbitrary and especially troubling because Anthropic was penalized while OpenAI was not.
The remarks land as AI investors weigh both competitive shakeouts and regulatory risk, with Hoffman arguing Anthropic and OpenAI can both win even as weaker AI bets fade.

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Turmoil in AI: xAI’s $1.75 Trillion Shakeup, Anthropic’s US Ban, and the Battle for Global Tech Sovereignty

Overview

June 2026 was a turbulent month for the artificial intelligence industry, marked by deep-seated issues within xAI and an unprecedented US government ban on Anthropic's advanced models. All 11 non-Musk co-founders left xAI after its merger with SpaceX, raising doubts about the company's future and reshaping the competitive landscape. At the same time, the government’s action against Anthropic sparked crucial debates about AI governance and national sovereignty. These events highlighted the growing challenges and risks in the AI sector, emphasizing the urgent need for clear regulation and strategic adaptation.

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