SpaceX's AI Unit Lays Off About 60 Grok Imagine Staff, Shifts to Coding and Agents

The cuts, made over the preceding week, took out more than half of the Imagine team, according to accounts of the report, and leave only a handful of employees to keep the product running. Imagine's image and video features remain available. SpaceX has not confirmed the layoffs, their size or what it plans for the product, and no new roadmap has been published.

The move reverses a public commitment. In March, Elon Musk said the company was doubling down on Grok Imagine. Management now wants to concentrate on coding tools and Grok Bot, the agent product built on the Grok chatbot, according to the report.

The Information gave two reasons for the retreat. Video generation consumes far more computing power than text, and Grok Imagine trails the leading video models in independent benchmarks. That field is led by Google's Veo, OpenAI's Sora and Chinese developers including ByteDance with Seedance, and SpaceX would have had to spend heavily on compute to close the gap.

Coding is a market where SpaceX has already paid for a position. It completed its acquisition of Cursor, the AI coding editor, on August 14 at an implied equity value of $60 billion, according to 24/7 Wall St. The company's Super Intelligence unit reported third-quarter revenue of $7.60 billion, up 830% from a year earlier, which it attributed to cloud services agreements and adoption of Cursor and Grok, the outlet reported. In coding assistants SpaceX competes directly with Anthropic's Claude Code and OpenAI's Codex, both of which have large installed bases among developers.

The Imagine layoffs are the latest in a run of staff losses since SpaceX took over xAI in February. More than 50 researchers and engineers working on Grok models had left by mid-May, through a mix of layoffs, dismissals and resignations, The Information reported at the time. Haotian Liu and Guodong Zhang, both linked to Imagine's leadership, were among those who left. Meta and Thinking Machines Lab have since hired former SpaceXAI staff. In September 2025, before the merger, xAI let go of about 500 data annotators on the Grok team and said it would hire specialist tutors instead.

For customers, the practical question is how long Imagine will be supported with a skeleton crew. The tool is still running, but with most of its builders gone, users and developers who rely on it for image or video output have no public commitment on updates, model improvements or pricing. SpaceX has not responded publicly to the report.