Tesla employees transition to Elon Musk's other companies

From electric cars to AI: The story of Tesla's talent drain!

by Faruk Imamovic
Tesla employees transition to Elon Musk's other companies
© Getty Images/Apu Gomes

Elon Musk's business empire, spanning multiple cutting-edge industries, presents a unique career trajectory for its employees. Those working within any of Musk's ventures, such as Tesla, xAI, and Neuralink, often find opportunities to transition between these entities, creating a dynamic yet controversial internal job market.

From Tesla to AI ventures

The flow of talent primarily originates from Tesla, Musk's flagship company, to his newer, less established ventures. Business Insider has tracked significant movement, particularly to xAI—an AI startup initially spun out of the social media platform Twitter, now rebranded as X—and Neuralink, which is pioneering technology to integrate computers with human brains.

At least 10 former Tesla employees have recently joined xAI, while at least 18 have moved to Neuralink. This trend raises concerns among Tesla supporters and investors, sparking lawsuits alleging that Musk is diverting crucial AI talent from Tesla to bolster his other business ventures.

This inter-company shift is particularly poignant with xAI, where Musk has been actively recruiting on X, stressing the need for more control over Tesla’s AI and robotics expansion.

Controversies and operational shifts

The controversy extends beyond mere employee reallocation.

Musk has also redirected critical AI components from Tesla to xAI, as reported by CNBC, a move that seems at odds with his public declarations of Tesla as an "AI/robotics company" committed to advancing technologies like self-driving cars and robotaxis.

These technologies rely heavily on Tesla's in-house neural networks and machine learning capabilities, which are foundational to the company's future. The situation is further complicated by Tesla's recent layoffs, which affected over 10% of its workforce, particularly the Autopilot division.

Several employees affected by these layoffs were promptly offered positions at xAI, indicating a strategic reshuffling rather than mere downsizing. xAI itself remains a small startup with around 15 full-time engineers and a business model heavily reliant on AI tutors—contract workers who manage data for Grok, xAI’s only product and a chatbot powered by a large language model trained with data from X.

The skill set required for these roles closely mirrors that of Tesla’s data annotation specialists, who support the company’s driver-assistance software by labeling data collected from Tesla vehicles.

Musk's management and future challenges

Musk's strategy of inter-company talent mobility underscores his operational ethos and the synergistic potential of his diverse business interests.

However, this approach also presents significant challenges, particularly in maintaining investor confidence in Tesla while nurturing startups like xAI and Neuralink. As Musk continues to leverage his extensive platform to steer his companies towards integrated technological advancements, the impact on employee careers and the broader tech ecosystem remains a focal point of both opportunity and contention.

Tesla Elon Musk