Yann LeCun Calls Elon Musk’s xAI ‘Kind Of A Failure’ – Casts Doubt On Ability to Compete Against OpenAI, Anthropic

According to a CNBC report, LeCun said the manner of departure of key members of xAI has made it increasingly difficult for the company to attract top talent.

• LeCun said xAI’s massive investment in AI infrastructure has forced the company to rent computing capacity to other firms to help offset its costs.
• Earlier this month, SpaceX signed a deal to provide Google with compute capacity worth $920 million per month.
• LeCun expects AI companies to eventually raise prices or face the big bubble explosion.

Yann LeCun, often referred to as the “Godfather of AI,” reportedly criticized Elon Musk’s xAI, calling it “kind of a failure,” and argued that the departure of key founding members has made it increasingly difficult for the company to attract top talent.

“xAI is kind of a failure, frankly, because the founding team has departed,” LeCun told CNBC on Thursday. “Elon is now in a position that is very, very difficult for him to kind of hire top people in AI, because he’s kind of, you know, not behaved in sort of very good ways toward the ... previous team.”

LeCun also said he remains skeptical about xAI’s long-term prospects and sees little chance of the company keeping pace with industry heavyweights such as OpenAI and Anthropic.

LeCun Believes Renting Out Infra Is The ‘Only Way’ Musk Can Recoup Cost

Earlier this year, Musk merged xAI with SpaceX in a deal that reportedly valued the combined AI business at $1.25 trillion. However, the AI segment posted a $2.5 billion operating loss during the first quarter.

LeCun argued that xAI’s massive investment in AI infrastructure has forced the company to rent computing capacity to other firms to help offset its costs.

xAI’s Colossus 1 and Colossus 2 data centers have attracted major customers, including Google and Anthropic. SpaceX has signed a deal to provide Google with compute capacity worth $920 million per month for 32 months. The company also announced a similar rental agreement with Anthropic last month.

AI’s Bubble Will Explode If Costs Remain High

Beyond xAI, LeCun expressed concerns about the economics of the entire AI sector. He noted that many AI companies continue to spend heavily on infrastructure while charging prices that may not fully cover their costs. According to LeCun, companies may eventually need to raise prices, reduce spending, or face what he called a “big bubble explosion.”

While he acknowledged that current AI systems excel at tasks such as coding and mathematics, he argued that their operating costs remain too high relative to what most users are willing to pay.

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