Elon Musk’s xAI Is Redefining Data Annotation—an Unglamorous But Vital Job in A.I.

Data annotation may not be the most glamorous job in Silicon Valley, but it’s indispensable for A.I. developers and has made companies like Scale AI multibillion-dollar ventures overnight. Training large language models requires armies of humans to label text, images and video so A.I. systems can learn from them. Now, Elon Musk’s xAI is reshaping how that work is done by shifting away from general contractors and toward experts in specialized fields it calls “A.I. tutors.”

In that vein, xAI recently laid off at least 500 generalist annotators, as reported by Business Insider. The cuts affected about one-third of the company’s 1,500-person annotation team. In emails cited by the outlet, executives described a “strategic pivot” toward hiring domain experts as specialist A.I. tutors.

“Specialist A.I. tutors at xAI are adding huge value,” said xAI in a Sep. 12 post on X that declared the company will “immediately surge” its specialist A.I. team by tenfold. The company did not respond to requests for comment from Observer.

What data annotation is and why it matters

Human annotators play a crucial role in fine-tuning raw data, ensuring it can be used effectively to train models. But the work has long been fraught. Firms that outsource this work, like Scale AI, have faced lawsuits from contractors alleging wage theft, misclassification and exposure to disturbing content without safeguards.

Unlike rivals that rely heavily on third parties, xAI employs a large in-house annotation team. Other A.I. leaders—including OpenAI and Google—have worked with Scale in the past, though both distanced themselves from the firm after Meta took a 49 percent stake and hired its CEO, Alexandr Wang, to lead its new superintelligence division. Today, many also contract with competitor Surge AI, which counts Anthropic and Microsoft among its clients.

xAI itself has previously tapped third-party annotators, but is now doubling down on its own staff. The company has posted openings for more than a dozen specialist tutor roles spanning A.I. safety, data science, STEM, finance, Japanese and even “memes and headline commentary.” The latter position involves improving Grok’s ability to “recognize and analyze memes, trolling and virality mechanisms,” according to the listing.

Qualifications for these roles are steep. For STEM specialists, candidates must hold a master’s or Ph.D. in a relevant field—or have earned medals in competitions like the International Mathematical Olympiad. xAI says tutors can work part-time or full-time and earn between $45 and $100 per hour.

The changes come as xAI faces wider turnover beyond its annotation team. In July, the company’s head of infrastructure, Uday Ruddarraju, left for rival OpenAI. Co-founder Igor Babushkin departed the following month to launch a venture capital firm. And in September, Mike Liberatore resigned after just three months as chief financial officer.