Legendary investor opens fire: SpaceX is not an AI company, xAI is a "complete failure" as all 11 co-founders have left

Legendary Silicon Valley entrepreneur and investor Reid Hoffman stated bluntly on the Pioneers of AI podcast: SpaceX is just a "high-priced version of CoreWeave," and xAI is a "complete disaster," with all 11 co-founders having left.
(Previous context: Musk transforms into a computing power arms dealer! SpaceX signs a $6.3 billion deal with Reflection, leasing Nvidia GB300 to boost open-source AI)
(Background supplement: Son Masayoshi disagrees with Musk's space data center: Launching rockets and maintenance costs are not cost-effective, plus communication latency)

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• SpaceX Buys AI with Market Cap, All 11 xAI Co-Founders Have Left
• Anthropic Hit with Government Stick: Not Rule of Law, but Politics
• OpenAI is a Search Frontend, Anthropic is an Enterprise Tool

Legendary Silicon Valley entrepreneur and investor Reid Hoffman (best known as LinkedIn co-founder and PayPal founding board member) recently appeared on the Pioneers of AI podcast, where he was interviewed by Rana el Kaliouby. He offered a rare but candid assessment of the current AI competitive landscape (he is also an investor in both Anthropic and OpenAI).

SpaceX Buys AI with Market Cap, All 11 xAI Co-Founders Have Left

Hoffman directly called out on the podcast: "SpaceX is not an AI company."

On June 12, SpaceX officially went public, with the core narrative of its IPO being AI infrastructure. Days after listing, it announced the acquisition of AI programming tool Cursor. Hoffman's interpretation was the complete opposite: this is not proof of AI capability, but a reflection of capability deficiency. "You can almost think of it as the IAC of the AI world," he said, borrowing Barry Diller's case of building an internet empire through acquisitions, "using market cap to acquire AI companies, buying an entry ticket."

In simple terms, IAC is a holding company that piles up valuation through serial acquisitions, not a tech company standing on core technology.

Regarding SpaceX leasing AI computing infrastructure to companies like Anthropic and using that to claim an AI identity, Hoffman was even more direct: "You are just a high-priced version of CoreWeave." CoreWeave is an AI computing power leasing company. In simple terms, it sells racks and electricity, not model capabilities.

In contrast, xAI's problems are more fundamental. Hoffman pointed out that xAI's foundation model building is a "complete disaster." Data shows that by May 2026, all 11 original co-founders of xAI had left. The exodus accelerated in February of this year. Moreover, xAI's flagship model Grok consistently lags behind Anthropic and OpenAI in various benchmark tests, and the company is undergoing its third restructuring.

Anthropic Hit with Government Stick: Not Rule of Law, but Politics

In mid-June, the U.S. government, in the form of export control orders, forcibly suspended access to two Anthropic models, Fable and Mythos, for all foreign persons. Hoffman commented, "This seems completely lacking in principle... rule of law and predictability," he said, "It looks more like they already had some friction with this company, so they're hitting them with a stick." He described the decision as authoritarian and completely unprincipled, though he also acknowledged there might be real cybersecurity concerns behind it.

But what really unsettles him is the asymmetry: Anthropic gets hit, but not OpenAI.

OpenAI is a Search Frontend, Anthropic is an Enterprise Tool

Hoffman also has a non-mainstream view of the market: OpenAI and Anthropic are not playing a zero-sum game. "We like to frame these stories as a boxing match, but in reality, both have plenty of room to win very big."

He outlined two different competitive tracks: Anthropic is strong in the coding domain and expanding into verticals like design and law; OpenAI and ChatGPT are more like a consumer-facing search frontend, while its Codex code product is "severely undervalued." As for Cursor, which was just acquired by SpaceX, Hoffman left a merciless observation: "Cursor's shine seems to have peaked a few months ago, and it's on the decline."

Regarding the bubble question, his answer was: "Saying all valuations are crazy is wrong; but saying some are isn't." The anchor supporting OpenAI and Anthropic's high valuations, he said, is a historical analogy: if AI eventually becomes as ubiquitous as electricity, these two companies will be the major infrastructure providers. Google's early business model theory was "enterprise servers," then AdWords appeared, "the best business model humans have ever invented."

The fact that today's AI companies' charging models are not yet clear doesn't mean they won't appear.