And then there were two: Of the original 11 co-founders who kickstarted xAI with Elon Musk three years ago, only two remain as the deep learning lab continues a personnel overhaul to compete with Anthropic and OpenAI. That rebuilding, insists Musk, is by design.

“xAI was not built right first time around, so is being rebuilt from the foundations up,” Musk said Thursday on his social media platform, X. By most measures, it isn’t going all that smoothly.

The most immediate pressure is competitive. This week, xAI co-founders Zihang Dai and Guodong Zhang left the outfit after Musk complained that the company’s AI coding tools were not effectively competing with Claude Code or Codex, rival programming assistants made by Anthropic and OpenAI, respectively. Musk said the company held an all-hands meeting on Wednesday that focused on how to catch up, which he predicted would be possible by the middle of this year.

Coding tools matter so much because they’re where the money is. While an early-year surge of users was powered by xAI’s lax regulation of Grok’s ability to produce sexual and even abusive imagery, coding tools are seen as the key revenue-generating tech for AI labs. That makes xAI’s current lag in this area more than a perception issue; it’s a business problem.

The personnel overhaul extends well beyond this week. A month ago, 11 senior engineers at xAI, including two co-founders, left the company following changes Musk described as a reorganization to suit a larger business. That effort was apparently insufficient: The Financial Times reported that SpaceX and Tesla executives have parachuted into the company to evaluate employees and fire those who don’t make the grade.

The two remaining co-founders, Manuel Kroiss and Ross Nordeen, along with Musk, have their work cut out for them.

Musk is now casting a wider net for talent. On Thursday, he said on X that he and another colleage, Baris Akis, are currently reviewing rejected employment applications in the company, with an eye toward reaching out to promising candidates who should have had a chance to interview. “My apologies,” Musk added, addressing the pile of strangers he’d ghosted.

For the sake of comparison, LinkedIn reports that xAI has just over 5,000 employees, compared to more than 7,500 at OpenAI and more than 4,700 at Anthropic.

On the hiring front, there’s at least one encouraging sign. Andrew Milich and Jason Ginsberg are joining xAI from the AI coding tool company Cursor, where the two held joint responsibility for product engineering. Unlike xAI, Cursor depends on frontier labs for access to the AI models it runs on. Their decision to join xAI may signal the importance of direct access to LLM and computing resources to run them — and suggest that xAI’s core asset, its own frontier model, is still an attractive draw.

Either way, the pressure to show results is as much external as it is internal. Now that xAI is part of SpaceX, and with a public offering of SpaceX shares anticipated, the cash-burning unit is under pressure to demonstrate real uptake on Grok, its LLM. (A stumbling AI division is not the story Musk needs investors to be reading.)

Longer term, Musk is betting on something bigger than coding tools. xAI’s Macrohard project — Musk is convinced the name is “a funny reference to Microsoft” — aims to create an AI agent capable of doing anything a white-collar worker can do on a computer. Toby Pohlen, chosen to lead the project in February, left within weeks, and this week, Business Insider reported that Macrohard was on pause.

Musk’s response has been to draft another of his companies into the project. He revealed for the first time that Macrohard is a joint effort with Tesla, which is also developing a complementary agent dubbed “Digital Optimus” — a reference to Tesla’s Optimus humanoid robot. In Musk’s description, the xAI language model would direct the Tesla agent as it performs tasks.

It’s ambitious; it’s also not unique. Instead, the vision is not far off from what Perplexity — an AI-powered search engine — is doing with its new “Everything is Computer” offering, which aims to offer enterprise users a dedicated “digital proxy” that can orchestrate their digital tasks. It also echoes what entrepreneur Peter Steinberger is now working on at OpenAI, after creating OpenClaw’s popular personal agents.

Digg — Kevin Rose’s reboot of his once-popular link-sharing site — is laying off a sizable portion of its staff, the company announced on Friday. The startup is not closing, however, Digg CEO Justin Mezzell said. Instead, Rose will return to work on Digg full-time as the company tries to find its footing.

Rose will continue to work as an advisor at investing firm True Ventures, but will make Digg his primary focus from here on out.

The startup had set out to offer an alternative to existing community forums, where people could post and share links, media, and text, and engage in topical discussions. But while Digg had clever ideas on how to better moderate content and verify that users were who they claimed to be, the company admits it was overwhelmed by bots even in its earliest days.

Nodding to the “dead internet theory,” which claims today’s web is more bots than people, Mezzell describes the problem of combating bot spam in a post on the Digg website.

“When the Digg beta launched, we immediately noticed posts from SEO spammers noting that Digg still carried meaningful Google link authority,” the blog post about the layoffs states. “Within hours, we got a taste of what we’d only heard rumors about. The internet is now populated, in meaningful part, by sophisticated AI agents and automated accounts. We knew bots were part of the landscape, but we didn’t appreciate the scale, sophistication, or speed at which they’d find us.”

The company said it banned tens of thousands of accounts, deployed internal tooling, and worked with external vendors, but it wasn’t enough. For a site that relied on user votes to rank content, an uncontrollable bot problem meant those votes couldn’t be trusted.

“This isn’t just a Digg problem. It’s an internet problem,” Mezzell notes.

Mezzell also said that taking on established rivals (likely a reference to Reddit) was too hard, calling the competition not just a moat but a wall.

The company didn’t share how many people were affected by the layoffs, but said that a small team will continue to rebuild Digg as something “genuinely different.” The Digg app has been pulled from the App Store, and the layoff post is currently the only content on Digg’s website. The Diggnation podcast — a video show Rose hosts — will continue, however.

For context, Rose and Reddit co-founder Alexis Ohanian acquired what remained of the old Digg earlier last year, intending to build up a site where communities had more moderator and admin control and ownership. The deal was a leveraged buyout involving True Ventures, Ohanian’s firm Seven Seven Six, Rose and Ohanian personally, and the venture firm S32. Funding details weren’t made public.

Digg was not immediately available for comment.

Eighteen months after selling his startup to chipmaker AMD for $665 million, Finnish entrepreneur Peter Sarlin has left his role as CEO of the unit now known as AMD Silo AI. He is now chairman at two new ventures: physical AI lab NestAI, and QuTwo, an AI startup aimed at helping companies prepare for the era of quantum computing

Currently fully funded by Sarlin’s family office, PostScriptum, QuTwo describes itself as “an AI lab for the quantum era.” Rather than waiting for quantum computing to mature, however, it is already working with enterprise customers — including European fashion retailer Zalando, with which it is developing what the two companies call “lifestyle agents,” AI tools designed to go beyond product search and proactively suggest products and experiences.

QuTwo is built on the premise that AI is hitting an efficiency wall that quantum computing may eventually help solve. But the company is not betting on when that will happen, Sarlin told TechCrunch. Instead, the startup is building QuTwo OS as an orchestration layer that allows companies to shift from classical to quantum computing — making use of hybrid computing along the way.

Sarlin invested in Finnish quantum companies IQM and QMill through PostScriptum, and is one of a growing number of investors who believe it will eventually outperform classical computers in a wide range of industry applications while easing AI’s energy demands. But he also thinks that initial use cases will require mixed hardware environments, and that enterprises would rather focus on their business problems while QuTwo OS takes care of the routing.

In that respect, the potential advantage of the middle ground known as “quantum-inspired” computing is that it is already viable today, because it uses classical hardware while simulating quantum behavior, working around the hurdles that still hinder quantum hardware. Meanwhile, QuTwo OS is designed to be flexible, supporting quantum or non-quantum algorithms and chips alike.

QuTwo’s team brings experience on both sides of the quantum-AI divide. On the quantum side, there’s IQM cofounder Kuan Yen Tan and board member Antti Vasara, also chair at SemiQon, a Finnish semiconductor startup focused on quantum chips. The enterprise side is equally represented, by Sarlin himself and Kaj-Mikael Björk, one of his former cofounders at Silo AI. Pekka Lundmark, the former CEO of Finnish telecom giant Nokia, also joined QuTwo’s board.

Across both areas, the team counts over 30 quantum and AI scientists, and Sarlin is clear where the company stands. “We’re building for the quantum world, but QuTwo is an AI company,” he said, meaning that QuTwo is “pushing AI workloads from classical to quantum.”

This also means that its customer base could be quite broad. Beyond Zalando, QuTwo also launched a joint quantum AI research initiative with OP Pohjola, a major Finnish financial services provider.

From the outset, QuTwo has been commercially minded and already has “large design partnerships which are in the tens of millions,” Sarlin said. Design partnerships — in which a vendor co-develops its product alongside enterprise customers — are a way for QuTwo to learn what those customers expect as it builds its product. They are also a bet from enterprises looking to establish early footing when and if quantum computing does arrive.

Nvidia kicks off its annual GTC developer conference in San Jose, California, next week with CEO Jensen Huang’s keynote scheduled for Monday at 11 a.m. PT / 2 p.m. ET.

GTC — which stands for GPU Technology Conference — is Nvidia’s flagship annual event, where the chipmaker typically uses the spotlight to announce new products, champion partnerships, and lay out its vision for the future of computing. Huang’s keynote will focus on Nvidia’s role in the future of computing and AI. You can watch the two-hour address in person at the SAP Center or livestream the talk on the event’s website.

The broader three-day event is focused on what’s coming next for AI across industries, including healthcare, robotics, and autonomous vehicles, among others.

On the software side, it’s rumored that Nvidia will release an open source platform for enterprise AI agents, dubbed NemoClaw, as originally reported by Wired. The platform would give businesses a structured way to build and deploy AI agents (software that can carry out multistep tasks autonomously) and would position Nvidia to mirror similar offerings from companies like OpenAI.

On the hardware side, the company is also rumored to be releasing a new chip designed to accelerate the AI inference process — the process by which an AI model applies what it has learned to generate responses or make decisions, as distinct from the initial training process, which requires far more computing power. Faster, cheaper inference is widely seen as one of the last bottlenecks to scaling AI applications broadly. The chip, if confirmed, would represent Nvidia’s latest bid to dominate not just the training market, where it already commands an estimated 80% share, but the inference market as well, where competition from custom chips built by Google, Amazon, and others is fast intensifying.

Kevin Cook, a senior equity strategist at Zacks Investment Research, told TechCrunch that attendees should also expect to learn what the company plans to do with its relationship with Groq, the inference company Nvidia reportedly paid $20 billion late last year to license its technology. There’s a lot of curiosity around this tie-up, given that Jonathan Ross, Groq’s founder; Sunny Madra, Groq’s president; and other members of the Groq team agreed to join Nvidia to help advance and scale that licensed tech.

There will, of course, also be a range of partnership announcements and demonstrations showcasing Nvidia’s AI capabilities across industries.