# Reid Hoffman: xAI Is a Train Wreck and SpaceX Is Just Buying Its AI Cred > Source: > Published: 2026-06-24 16:36:08+00:00 Buying a company doesn’t make you that company. That’s the core of ** Reid Hoffman’s** argument against SpaceX’s AI ambitions — and he’s not being subtle. In a recent interview covered by Fortune and Yahoo Finance, the PayPal co-founder and LinkedIn creator called xAI [“](https://fortune.com/2026/06/24/reid-hoffman-spacex-musk-openai-anthropic-gen-z-mistake/) [a complete train wreck](https://news.ycombinator.com/item?id=48658647) [“](https://fortune.com/2026/06/24/reid-hoffman-spacex-musk-openai-anthropic-gen-z-mistake/)and labeled SpaceX “a **premium-priced CoreWeave**” — essentially an expensive GPU landlord dressed up in AI clothing. Worth flagging immediately: Hoffman holds stakes in both OpenAI and Anthropic, making his critique informed but hardly disinterested. That context matters given OpenAI’s sweeping infrastructure ambitions, including the [Stargate Project](https://www.gadgetreview.com/openai-and-partners-launch-500-billion-stargate-project). ## The Musk AI Machine Is Burning Through Founders and Credibility *Every original xAI co-founder besides Musk has left, and SpaceX’s post-IPO Cursor acquisition looks more like a patch job than a strategy.* SpaceX went public in June with AI infrastructure as its marquee growth story. Days later, it announced the acquisition of **Cursor**, an AI coding assistant. Hoffman sees this as Barry Diller’s IAC playbook — the early-2000s internet roll-up strategy where you buy relevance instead of building it. “You’re a premium-priced CoreWeave… which is not an AI company,” [he told Yahoo Finance](https://finance.yahoo.com/technology/ai/articles/reid-hoffman-says-spacex-not-090000334.html). The xAI situation is harder to spin. Founded in **2023** with Musk and 11 co-founders, the company has since lost every single one of those original partners: - Kyle Kosic departed for OpenAI - Igor Babuschkin pivoted to launching his own venture firm - By spring 2026, not one of the original eleven remained Musk has framed some departures as “[push not pull](https://techcrunch.com/2026/02/13/elon-musk-suggests-spate-of-xai-exits-have-been-push-not-pull/),” according to TechCrunch reporting — suggesting firings rather than defections. Grok’s benchmark performance, meanwhile, continues to trail models from Anthropic and OpenAI, adding weight to Hoffman’s “train wreck” characterization. “As Elon himself has described, it’s a complete train wreck for its kind of building of foundational models.” — [Reid Hoffman](https://fortune.com/2026/06/24/reid-hoffman-spacex-musk-openai-anthropic-gen-z-mistake/), according to Fortune. ## Two Winners, One Regulatory Mess, and a Generation Caught in the Middle *Hoffman argues OpenAI and Anthropic can both thrive, but regulatory asymmetry and job displacement complicate the picture considerably.* Hoffman rejects the zero-sum framing. Anthropic excels at code generation and is expanding into legal and design applications. [OpenAI](https://www.gadgetreview.com/openais-34-billion-burn-losses-grew-8x-ahead-of-ipo) owns the consumer search layer through ChatGPT, with Codex capabilities [Hoffman calls](https://www.bitget.com/amp/news/detail/12560605475714) “insufficiently talked about.” He even questions whether Cursor — the tool SpaceX just acquired — has already peaked, now “fading over the horizon” under pressure from Claude Code and Codex. Buying a fading asset doesn’t exactly shore up the AI narrative. The Anthropic export-control episode troubles him on different grounds. After Amazon CEO Andy Jassy flagged a jailbreak vulnerability in the Fable 5 model, regulators issued an order on **June 11, 2026**, suspending foreign national access to two Anthropic models. Cybersecurity experts called the response disproportionate, according to Fortune reporting. Hoffman went further, describing the action as “autocratic willy-nilly” — particularly since [OpenAI faced](https://www.gadgetreview.com/openai-secretly-funded-child-safety-coalition-pushing-ai-age-laws) no equivalent restriction. For Anthropic, which is preparing for one of the largest anticipated AI IPOs in history, that kind of unpredictable regulatory intervention becomes a new category of investor risk. For Gen Z, the numbers sting regardless of cause: - Graduate unemployment has climbed from **3.6%** in 2019 to**5.6%** in 2026 **35%** of entry-level postings now demand three or more years of experience, per Fortune reporting- Goldman Sachs’ AI tracker estimated AI was erasing roughly **11,000** net U.S. jobs per month as of mid-2026, with[entry-level knowledge roles](https://www.gadgetreview.com/melody-humanoid-robot-the-175000-shift-that-just-made-your-receptionist-obsolete)hit hardest When AI’s most enthusiastic advocates start drawing sharp lines between real builders and [infrastructure](https://www.gadgetreview.com/pentagon-locks-in-palantirs-ai-as-core-military-infrastructure) cosplayers, you should pay attention. The consolidation isn’t coming. It’s already here.