THE DECODER

Elon Musk's AI company xAI has laid off about 500 employees, including a third of its data annotation team. These workers had been training the company's chatbot Grok by sorting and explaining raw data. According to internal emails seen by Business Insider, xAI is eliminating most roles for so-called generalist tutors and plans to hire more specialists instead. Employees will continue to be paid through the end of their contracts, or no later than November 30, but lost access to company systems immediately. Just before the cuts, staff were required to take skills tests that were supposed to determine their future roles. On X, the company said it plans to expand its team of expert tutors in fields like science, medicine, and finance "tenfold." The idea is to give Grok deeper domain knowledge, a move similar to practices at other AI firms, which often outsource this work to external contractors. As a result, low-cost mass data annotation work is beginning to lose its role, gradually being replaced by the very AI systems it helped build.