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The LinkedIn co-founder and investor in both Anthropic and OpenAI offers his most pointed public assessment yet of Elon Musk\u2019s AI ambitions\u2014and raises alarms about the government\u2019s handling of Anthropic\u2019s pulled models<\/em><\/p>\n Reid Hoffman has watched the AI industry from virtually every vantage point\u2014as a founder, a lead investor and as a decade-long Microsoft board member. So when he calls SpaceX\u2019s AI strategy \u201cbuying your way into relevance\u201d and describes xAI as \u201ca complete train wreck,\u201d it\u2019s not a hot take from the sidelines, but a verdict from one of Silicon Valley\u2019s most respected voices.<\/p>\n \u201cSpaceX isn\u2019t an AI company,\u201d Hoffman said in a conversation with Rana el Kaliouby on her Pioneers of AI<\/em> podcast. \u201cXAI is, as Elon himself has described, it\u2019s a complete train wreck for its kind of building of foundational models and other kinds of things.\u201d He also noted that all of its founders have left and it\u2019s on its \u201cthird restart.\u201d<\/p>\n The xAI co-founder exodus has been well-documented. By May 2026, all 11 of xAI\u2019s original co-founders had departed the company, a cascade that began in earnest in February when Tony Wu, described as one of the most operationally central co-founders, announced his resignation. Musk restructured xAI\u2019s teams in response, but the departures continued. The company\u2019s flagship Grok models have faced persistent criticism for lagging behind competitors from Anthropic and OpenAI in benchmark performance.<\/p>\n The timing of Hoffman\u2019s remarks is pointed. SpaceX went public on June 12th, with AI central to its IPO narrative. Within days, the company announced it was acquiring Cursor, the AI coding tool. Hoffman\u2019s read: that\u2019s not proof of AI capability, but evidence of its absence. \u201cYou could almost think of it as the IAC of AI,\u201d he said, invoking the serial acquisitions roll-up strategy of Barry Diller\u2019s internet-era conglomerate. \u201cUse the market cap to buy AI companies and try to buy your way into relevance.\u201d<\/p>\n His assessment of SpaceX\u2019s core compute business was equally withering. The company has positioned revenue from leasing AI infrastructure\u2014including to Anthropic\u2014as validation of its AI credentials. \u201cYou\u2019re a premium-priced CoreWeave,\u201d Hoffman said. \u201cI get it. Which is not an AI company.\u201d<\/p>\n If Hoffman\u2019s SpaceX commentary was skeptical, his reaction to the U.S. government forcing Anthropic to pull its Fable and Mythos models from the market was something closer to alarmed.<\/p>\n The directive, issued by the U.S. government on June 11th as an export control order, suspended all foreign national access to the two models. The trigger, according to reporting from Fortune<\/em>, was Amazon CEO Andy Jassy raising the alarm about a discovered jailbreak in the Fable 5 model\u2014a vulnerability that Anthropic itself had been working to address. Cybersecurity experts widely criticized the government\u2019s response as disproportionate and poorly scoped.<\/p>\n Hoffman lands in a similar place. \u201cIt doesn\u2019t look like there\u2019s anything that\u2019s a particular principled, here\u2019s-the-way-that-we\u2019re-navigating-through-things, apply-kind-of-a-rule-of-law-and-predictability,\u201d he said. \u201cIt\u2019s more like, \u2018Hey, we kind of had some contentious interactions with this company anyway, so we\u2019re going to hit them with a stick.’\u201d And that doesn\u2019t come with any kind of principled explanation, he added.<\/p>\n He called the approach \u201cautocratic willy-nilly\u201d and \u201cvery sub-optimum,\u201d while acknowledging there may be a legitimate cybersecurity basis. The asymmetry\u2014Anthropic penalized while OpenAI was not\u2014is what troubles him most. Notably, Anthropic itself had flagged security concerns about the models, a detail that el Kaliouby raised in the conversation.<\/p>\n For a company preparing for what is expected to be one of the largest IPOs in history, unpredictable regulatory intervention creates a new category of investor risk\u2014one that the Fable\/Mythos episode has now made concrete.<\/p>\n Hoffman, who is an investor in both Anthropic and OpenAI, pushed back firmly on the narrative that the two companies are in a zero-sum race. \u201cWe tend to want to tell these stories as cage matches,\u201d he said, as in two companies enter and only one leaves, but \u201cin fact,\u201d he claimed, \u201cthere\u2019s a lot of room for both of them to win incredibly.<\/p>\n He sketched distinct competitive lanes: Anthropic strong in code and expanding into design and legal; OpenAI and ChatGPT functioning more like a consumer search front-end, with its Codex coding product \u201cinsufficiently talked about\u201d given its strength. The one pointed question he raised: whether Cursor, just acquired by SpaceX, had already peaked. \u201cCursor seems to have had its bright star some number of months ago and seems to be fading over the horizon,\u201d he said. Cursor has faced mounting pressure since early 2026 as Claude Code and Codex have gained ground, with developers increasingly questioning whether a standalone coding IDE still commands a premium. But of course, Hoffman has a vested interest in arguing each of these positions.<\/p>\n On the subject of a bubble, he offered a framework for understanding speculation in the markets. It\u2019s wrong to say all of the valuations are crazy, he said, but not some. \u201cThe trick is, which ones?\u201d His anchor for the bullish case on OpenAI and Anthropic: If AI becomes as pervasive as electricity, these will be two of the primary utilities\u2014and the revenue model doesn\u2019t need to be fully visible today. Google\u2019s early theory of monetization, after all, was enterprise servers, and then came AdWords\u2014\u201dthe best business model invented in human history\u201d thus far.<\/p>\n On the question of how young people should navigate an AI-saturated job market, Hoffman\u2019s advice was blunt and cut against a prevailing narrative.<\/p>\n \u201cI\u2019ve been thinking about writing an essay on the kind of mistakes that are made by college graduates booing or otherwise dissing AI,\u201d he said. As if speaking to all of Gen Z, he added: \u201cYou guys have the opportunity to be generation AI\u2014where you come into the workforce saying, \u2018I know this a lot better than all of you. You should be hiring me in order to help you become AI native organizations and so forth.\u2019 And it should be an opportunity, not a threat.\u201d<\/p>\n Goldman Sachs publishes a semi-regular AI tracker which found in April 2026 that AI was already erasing roughly 16,000 net U.S. jobs per month, and 11,000 as of earlier this month, with Gen Z bearing a disproportionate share of the impact as entry-level knowledge roles face the highest displacement risk. Separate research found graduate unemployment had risen from 3.6% in 2019 to 5.6% in 2026. By mid-2026, 35% of entry-level job postings required at least three years of experience, and 45% of companies were using automated rejection systems at early hiring stages.<\/p>\n Hoffman\u2019s counter is that most of that pain is being misattributed. The entry-level slump, he argued, has more to do with other factors\u2014with \u201cAI washing\u201d doing much of the narrative work in the interim. \u201cIt\u2019s actually, in fact, because of global turbulence and businesses being unable to figure out how to invest and plan,\u201d he said. \u201cIt\u2019s because of basically over-hiring in the pandemic and the, hey, maybe remote work really does work. Oh, right. Remote work\u2019s pretty hard to make work.\u201d<\/p>\n His prescription, drawn from his book Superagency<\/em>, is an agency mindset: treat AI not as a threat to your career but as the instrument of it. \u201cThe AI is my tool, companion, car, et cetera, as I navigate things,\u201d he said. \u201cThe AI can do a whole bunch of amazing things itself but is not complete \u2014 and humans can add in a lot of significant and important things.\u201d<\/p>\n Hoffman\u2019s departure from the Microsoft board\u2014he chose not to stand for reelection and remains on through year-end\u2014closes a chapter that included facilitating the LinkedIn acquisition (\u201cone of the epic M&As of history\u201d), steering the GitHub purchase, and helping broker trust between Microsoft and OpenAI in the early days of their partnership. He described the decision simply: he\u2019d rather be a founder than a governance person. He and Satya Nadella, he noted, still talk strategy. \u201cAs a matter of fact, Satya and I were just on the phone today.\u201d<\/p>\n What comes next is drug discovery. Manas AI, his company with co-founders Ujjwal and Sid, is generating small molecule proposals that their computational chemists are calling genuinely promising\u2014the trigger, Hoffman says, for his decision to go all-in. The pitch deck, he revealed, describes Manas as \u201can AI drug discovery factory for creating monopolies\u201d \u2014 legally permissible, he notes, because pharmaceutical IP functions as a sanctioned monopoly by design. For the man who helped build the LinkedIn and Microsoft era of tech, it may be the longest-horizon bet he\u2019s ever made.<\/p>\n For this story,\u00a0<\/em>Fortune\u00a0journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.<\/em><\/p>\n<\/div>\n #Reid #Hoffman #SpaceX #company #xAI #train #wreckand #room #OpenAI #Anthropic<\/p>\n","protected":false},"excerpt":{"rendered":" The LinkedIn co-founder and investor in both Anthropic and OpenAI offers his most pointed public assessment yet of Elon Musk\u2019s AI ambitions\u2014and raises alarms about the government\u2019s handling of Anthropic\u2019s… <\/p>\n","protected":false},"author":1,"featured_media":8912,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[536,630,743,428,10980,10203,735,10979,10978,3546,1843,6098,10982,10981],"class_list":["post-8911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-anthropic","tag-company","tag-elon-musk","tag-gen-z","tag-hoffman","tag-linkedin","tag-openai","tag-reid","tag-reid-hoffman","tag-room","tag-spacex","tag-train","tag-wreckand","tag-xai"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/8911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8911"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/8911\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/8912"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\nThe Anthropic situation<\/strong><\/h2>\n
Room for both\u2014but not for everyone<\/strong><\/h2>\n
Tell Gen Z to stop booing AI<\/strong><\/h2>\n
The Microsoft chapter closes<\/strong><\/h2>\n