Musk staffs xAI with Starlink loyalists ahead of a $1.25 trillion listing

Elon Musk is rebuilding xAI with Starlink loyalists ahead of one of the largest listings in history, and Bloomberg’s new feature shows how messy it is inside.

The exodus and the playbook

The feature, based on interviews with about a dozen people familiar with the company, describes what happened after SpaceX absorbed xAI: dozens of employees left, including most of the cofounders, and daily operations turned chaotic.

Musk responded with his usual playbook: redeploy trusted lieutenants from Starlink and Tesla. Longtime Starlink executive Michael Nicolls became xAI’s president in April with one clear mandate: catch up with Anthropic’s Claude. According to the report, every time Claude ships an update, Musk wants Grok to match it.

That is an unusual way to run a frontier lab: the competitive target is not a benchmark or a research roadmap but a rival’s release calendar.

The numbers behind the drama

The financials come from SpaceX’s own IPO filing, and they are stark:

• A $2.47 billion operating loss on $818 million of revenue in Q1 2026
• Capex for the AI segment of $7.7 billion in a single quarter
• A combined SpaceX and xAI listing targeting a valuation around $1.25 trillion

The gap between those numbers is the story. xAI is burning roughly three dollars for every dollar it earns, while spending nearly ten times its quarterly revenue on infrastructure, all while preparing to ask public markets for a trillion-dollar-plus valuation.

What the listing will test

IPOs force clarity. The combined SpaceX and xAI offering will bundle a profitable rocket and satellite business with an AI lab in heavy investment mode, and investors will have to price the package as one.

The open question from the Bloomberg reporting is whether loyalty-based management can stabilize a lab that lost most of its founding team. Can loyalty outrun a $2.5 billion quarterly burn? The IPO pricing will be the first public answer.