Elon Musk's xAI fires 500 data annotators amid plans to expand specialist AI tutor team

xAI, Elon Musk's AI venture, has reportedly reduced its data annotation team by at least 500 employees, according to a Business Insider report on Friday. This team plays a crucial role in the development of Grok, xAI's chatbot.

The company reportedly informed employees via email on Friday night about the planned downsizing of its generalist AI tutor team, the report said, referencing multiple messages they reviewed.

Responding to a request for comment by Business Insider, xAI pointed to a post on X in which it was actively recruiting for various roles and intended to expand its specialist AI tutor team by "10X."



Business Insider noted that the data annotation team, xAI's largest, is responsible for training Grok to comprehend the world. They achieve this by providing context and categorising raw data.

Workers were informed that their compensation would continue until the end of their contract or November 30. However, their access to company systems was terminated immediately upon receiving the layoff notice, the report stated.

The Wall Street Journal reported earlier this month that xAI's finance chief, Mike Liberatore, departed the company around the end of July.He had only been in the role for a few months.

Musk established xAI in 2023 with the aim of competing with major tech companies in the AI field. He has criticised industry leaders for what he perceives as excessive censorship and inadequate safety measures.