Partner Resigns to Launch VC, Musk Puts in $200 Million as LP
Reports indicate that Igor Babuschkin, co-founder of xAI and partner to Elon Musk, has announced his departure from xAI.
“Today is my last day at xAI, a company I co-founded with Musk in 2023,” Igor Babuschkin wrote on the social platform X, a post that quickly topped trending searches.
Igor Babuschkin revealed he will establish Babuschkin Ventures, a venture capital firm dedicated to supporting AI safety research and startups. The firm will back AI safety studies and invest in startups “driving human progress and unveiling the universe’s mysteries.”
It’s understood that Babuschkin, the youngest yet most enigmatic co-founder and engineering lead at Musk’s AI startup xAI, played a pivotal role.
Musk responded, “Without you, there would be no xAI today.”
xAI was founded in July 2023 by Musk and Babuschkin, with its core mission, as defined by Musk, being “to understand the true nature of the universe.”
Just three months later, Babuschkin led his team to build the “Memphis Supercluster” with 100,000 H100 GPUs, boasting a peak performance of 2.6 exaFLOPS (FP16), 33% faster than GPT-4’s training speed at the time.
In March of the following year, his team launched Grok-1 (314 billion parameters), with an upgrade to Grok-4 by November 2024, scoring 87.4 on the MMLU benchmark, just behind GPT-4 Turbo’s 87.6.
More impressively, xAI raised $6 billion in its Series B round in May 2024, reaching a post-money valuation of $24 billion, with investors including A16Z, Sequoia, and Saudi PIF.
Reports suggest Babuschkin personally developed a scheduling framework that reduced multi-GPU parallel training recovery time from an average of 30 minutes to 90 seconds. He later introduced heterogeneous TPU-v5 and GPU training, cutting the cost per trillion tokens by 27%.
Undoubtedly, Babuschkin is a tech titan recognized by Musk. His departure is a loss for Musk, who replied on X: “Without you, there would be no xAI today.”
Musk Pledges $200 Million as Babuschkin’s LP
In an open letter, Babuschkin distilled his resignation reason into one sentence: “After helping xAI get on track, I want to stake my next career phase on AI safety.”
In June this year, he dined with Max Tegmark, founder of the Future of Life Institute (FLI), in Cambridge. The two reviewed recent Grok incidents—such as the “Mechanical Hitler” self-revelation and deepfake Taylor Swift cases—ultimately tracing these to gaps in safety guardrails and governance frameworks. This became the trigger for Babuschkin’s decision to leave and focus on AI safety.
Regarding funding for Babuschkin Ventures, here’s the situation: Babuschkin personally invested $50 million as the GP’s initial capital. The first LP round has secured commitments from the Texas Teacher Retirement Fund ($500 million) and Musk’s family office ($200 million). The fund aims for a $1 billion target with a “10+2” year term.
You helped me build an empire, I’ll fund your VC—this $200 million pledge is a romance between two men.