On May 7, 2026, Elon Musk announced that xAI — the AI company he founded in 2023 to compete with OpenAI and Anthropic — is being dissolved as a separate entity. Grok, its flagship AI model, will continue under a new division called SpaceXAI. All 11 original co-founders have left. The Colossus supercomputer in Memphis is now being leased to Anthropic. And the API you might be using is about to migrate.
If you use Grok through the API — for tools, agents, or automation — this directly affects you. Here's what's changing, what stays the same, and what to do about it.
Key Takeaway
Your Grok API calls won't break immediately. Old model slugs auto-redirect to Grok 4.3 as of May 15. But the API endpoint (api.x.ai) will migrate to a SpaceX-branded URL on a timeline not yet announced. If you rely on Grok, have a fallback provider ready.
What Actually Happened?
| Event | Date | Impact |
|---|---|---|
| SpaceX acquired xAI | February 2, 2026 | xAI became SpaceX subsidiary ($250B valuation) |
| Half of co-founders left | February 2026 | Internal instability, reputational issues cited |
| Colossus 1 leased to Anthropic | May 6, 2026 | xAI's flagship compute asset now powers a competitor |
| xAI dissolved announcement | May 7, 2026 | Company ceases to exist, becomes SpaceXAI division |
| Old models retired | May 15, 2026 | All old slugs redirect to Grok 4.3 |
| API endpoint migration | TBD (12+ month window) | api.x.ai will move to SpaceX-branded URL |
What Happens to the Grok API?
Right now (May 2026): The API at api.x.ai continues to function. Old model slugs (grok-4-1-fast, grok-4-fast-reasoning, etc.) automatically redirect to grok-4.3 as of May 15. No code changes required to avoid breakage.
Near-term (2026-2027): The endpoint will migrate to a SpaceX-branded URL. xAI has committed to a 12+ month transition window. Existing API customers will receive migration instructions. This means contract reassignment and updated service agreements, not service interruption.
Pricing changed: Grok 4.3 costs $1.25 per million input tokens and $2.50 per million output tokens. If you were using cheaper retired models, your costs may increase. If you were using more expensive reasoning models, your costs may decrease (old reasoning models redirect to grok-4.3 with low reasoning effort).
💡 What We Did at HundredTabs
We use Grok as our primary API for the Prompt Optimizer and article translations, with DeepSeek as our fallback. When grok-4-1-fast was retired on May 15, we switched to grok-4.3. Our fallback to DeepSeek ensures that if the SpaceXAI migration causes any disruption, our tools stay online. If you use Grok in production, set up a similar fallback — it takes 10 minutes and saves you from outages.
📬 Getting value from this? We track AI infrastructure changes that affect your tools, weekly. Get it in your inbox →
---Why Did Musk Dissolve xAI?
The official reason: "maintaining a separate entity with its own board, fundraising overhead, and corporate infrastructure is inefficient." The practical reason: xAI had completed its $12B fundraising, Colossus was built, and the company was using only 11% of its compute capacity for Grok. The other 89% was sitting idle.
The most revealing detail: SpaceX is now leasing Colossus 1 — xAI's $1B+ Memphis supercomputer with 220,000+ Nvidia GPUs — to Anthropic. Musk spent years criticizing Anthropic publicly, but now SpaceX is directly powering Claude's infrastructure. Business pragmatism won over ideological positioning.
The restructuring was framed internally around "speed of execution," but CNBC reported it reads more like damage control after the departure of all 11 co-founders and a series of controversies including Grok's unrestricted generation of deepfakes.
Is Grok Still Worth Using?
Grok 4.3 is a capable model — xAI's own documentation calls it "the fastest, most intelligent model we have ever built," with top leaderboard positions in agentic tool calling and instruction following. At $1.25/$2.50 per million tokens, it's significantly cheaper than Claude Sonnet ($3/$15) and competitive with GPT-5.4.
But Grok's positioning has shifted. When xAI launched, the pitch was "the most capable, most truth-seeking, most uncensored model." The current reality is a cost-competitive mid-tier option — good quality at great pricing, but not market-leading on benchmarks. For most use cases — automation, agent workflows, routine tasks — that's perfectly fine. For quality-critical work, Claude and GPT remain stronger.
The uncertainty is organizational, not technical. With all co-founders gone and Grok now embedded inside a rocket company, the AI development roadmap is less predictable. Grok 5 development is reportedly continuing under SpaceXAI, but whether the team can maintain frontier ambitions within SpaceX's structure is an open question.
What Should You Do Right Now?
If you use the Grok API: Update your model string to grok-4.3 (old slugs redirect but at potentially different pricing). Set up a fallback provider — DeepSeek or OpenAI — for continuity during the eventual endpoint migration.
If you use Grok chat (on X): Nothing changes immediately. Grok continues to work on X/Twitter. The branding will gradually shift to SpaceXAI.
If you're choosing an AI provider: Grok 4.3 is excellent value at $1.25/$2.50 per million tokens. But factor in the organizational uncertainty. For mission-critical applications, a provider with more stable corporate structure (Anthropic, OpenAI, Google) reduces operational risk. For cost-sensitive workloads, Grok remains one of the best deals available.
For help choosing the right AI model for your workflow, take the 60-second Model Picker Quiz. To optimize your prompts for any model — Grok, Claude, or GPT — try the free Prompt Optimizer.
---📬 Want more like this? We track every major AI change that affects your workflow. Subscribe free →
---Frequently Asked Questions
Will the Grok API stop working?
No. The API continues to function at api.x.ai. Old model slugs redirect to grok-4.3 automatically. The endpoint will eventually migrate to a SpaceX-branded URL, but xAI committed to a 12+ month transition window with migration instructions.
Does this affect Grok on X/Twitter?
Not immediately. Grok continues to function within X. The branding will gradually transition to SpaceXAI, but the user experience remains the same.
Why is Anthropic using xAI's compute?
SpaceXAI has excess compute capacity (using only 11% for Grok). Rather than let 89% sit idle, SpaceX leased Colossus 1 to Anthropic. The deal generates revenue for SpaceX and gives Claude access to significantly more compute — which is why Claude Code rate limits doubled recently.
Should I switch away from Grok?
Not necessarily. Grok 4.3 offers strong performance at competitive pricing. But have a fallback provider configured. The organizational transition from xAI to SpaceXAI introduces uncertainty that a backup provider eliminates.
Disclosure: HundredTabs uses Grok (via xAI/SpaceXAI API) as its primary AI provider and DeepSeek as its backup. This article reflects our direct experience with the migration. See our full disclosure policy.