SpaceX's AI Unit Cuts About 60 Jobs From Grok Imagine Video Team

Only a small group remains to maintain the product, according to the report. The cuts follow earlier reductions to the same team in previous months. The company has not commented publicly on the layoffs or on what they mean for Grok Imagine, which is still available to users.

The cuts show where Elon Musk's AI group is now spending its computing power. SpaceX took over xAI in February in an all-stock deal valued at $250 billion and folded it into a group called SpaceX Super Intelligence. Investing.com reported that management is moving resources away from video and image models, which are expensive to run, and toward AI coding tools and Grok Bot, its autonomous software agent. Generating video takes far more computing power than processing text. In August, SpaceX bought the AI coding startup Cursor for $60 billion, Investing.com reported.

The Information also cited independent benchmarks showing Grok Imagine trailing leading rival models. That weakened the case for continued heavy spending on it.

The reversal is a sharp one. In March, Musk called the next version of Grok Imagine "epic" in a post on X and said the company would step up its efforts in the field.

The AI business has been reorganised since the merger into four areas: Grok Main and Voice, coding, Imagine, and Macrohard. Several co-founders and senior researchers have left. In September 2025, xAI laid off about 500 data annotators.

SpaceX's pullback leaves fewer US companies building their own video models. OpenAI reportedly shut down its Sora video tool earlier this year because of computing costs. According to Investing.com, that leaves Google and Meta as the main US players still training video models. In China, ByteDance, Kuaishou and MiniMax treat visual models as strategic priorities. ByteDance's Seedance 2.5 is widely seen as the industry benchmark, and MiniMax's open-source H3 model now serves as base infrastructure for several US startups, according to The Information.

The company has not said whether Grok Imagine will be wound down or rebuilt later.