- Yann LeCun called Elon Musk's xAI a failure due to talent loss and leadership issues
- LeCun said xAI struggles to attract top AI researchers amid Musk's controversial behavior
- xAI's large infrastructure is offset by leasing computing capacity to other firms
Yann LeCun, one of the pioneers of modern artificial intelligence, has delivered a scathing assessment of Elon Musk's xAI, calling the company a failure and questioning its ability to compete with industry leaders such as OpenAI and Anthropic.
Speaking to CNBC, LeCun said xAI has struggled to retain top talent and faces significant challenges in attracting leading AI researchers.
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"xAI is kind of a failure, frankly, because the founding team has departed," LeCun said.
"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."
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The remarks mark the latest chapter in a long-running public disagreement between LeCun and Musk, who have frequently clashed over the future of artificial intelligence. Musk has previously accused LeCun of being "out of touch with AI," while LeCun has criticised Musk's views on a range of issues, including AI safety and social media.
LeCun argued that xAI's extensive infrastructure investments are not enough to secure its position in the rapidly evolving AI race. Referring to the company's massive data-centre operations, including the Colossus facilities in Memphis, Tennessee, he said xAI is relying on renting out computing capacity to offset costs.
"xAI has huge infrastructure," LeCun said, adding that the company leases capacity to other firms because "that's the only way he [Musk] can recoup the cost."
The AI researcher said he remains unconvinced about xAI's prospects and does not expect it to challenge OpenAI or Anthropic at the frontier of AI development.
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Beyond xAI, LeCun also raised concerns about the economics underpinning the broader AI industry. He argued that many AI companies continue to burn cash as the cost of developing and running advanced models remains far higher than what users are willing to pay.
"The prices are going up of those AI services, but the cost of running them is going down, but not nearly fast enough," he said. "All of those companies are losing money, and basically, the use for most people is funded by the investors."
LeCun warned that AI developers may soon face difficult choices between raising prices, cutting costs or accepting lower growth.
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