Elon Musk is integrating SpaceX with xAI to advance space-based artificial intelligence ahead of a much-anticipated IPO.
Elon Musk is taking a dramatic move toward unifying his space exploration and artificial intelligence aspirations, announcing the merger of key enterprises ahead of what is generally expected to be a massive IPO later this year.
SpaceX announced Monday that it had bought xAI, Musk’s artificial intelligence company, bringing several of his major enterprises under one banner. The agreement essentially brings together SpaceX, xAI’s AI chatbot Grok, satellite communications business Starlink, and Musk’s social media platform X, as the billionaire aims to bolster his position in both the aerospace and AI sectors.
Musk’s vision centers on the creation of artificial intelligence infrastructure beyond Earth. He has often suggested that locating data centres in space might significantly lower the enormous electrical and resource costs associated with running AI systems on Earth.
“In the long term, space-based AI is obviously the only way to scale,” Musk said in a statement posted on SpaceX’s website, citing the continual availability of solar power. “It’s always sunny in space!”
He also predicted that within the next two to three years, creating AI computer power in space might be cheaper than doing it on Earth.
While SpaceX proceeds in this path, it will encounter competition from other tech behemoths. Google, for example, is working on Project Suncatcher, a research program aiming at launching solar-powered satellites outfitted with AI chips, with a prototype due as early as next year.
However, Musk’s optimism is not widely shared. Microsoft president Brad Smith recently raised doubts about the practicality of space-based data centers, implying that firms are unlikely to relocate operations from land to low-Earth orbit in the foreseeable future.
The merger also comes amid fierce competition in the artificial intelligence market. Musk launched xAI in 2023 as a competitor to OpenAI, a business he helped build over a decade ago but later parted ways with. Grok, xAI’s flagship product, is positioned as an alternative to ChatGPT, while OpenAI prepares for an IPO.
Beyond AI and space, Musk is also changing Tesla’s future. With car sales stagnating, the electric vehicle manufacturer is focusing on self-driving taxis and humanoid robots driven by artificial intelligence. Tesla just announced a $2 billion investment in xAI, emphasizing the growing overlap between Musk’s enterprises.
This is not the first time Musk has consolidated operations throughout his corporate empire. Tesla purchased SolarCity in 2016, and xAI recently acquired X, formerly known as Twitter. Wall Street speculation has subsequently increased over the likelihood of a deeper merging of Musk’s ventures, with some investors even predicting a future merger between Tesla and SpaceX.
According to Forbes, Musk’s net worth is $768 billion. His portfolio also includes Neuralink, a brain implant startup, and The Boring startup, which specializes in subterranean transportation tunnels.
Details about SpaceX’s acquisition of xAI were not revealed. External investors include 1789 Capital, a fund affiliated to Donald Trump Jr., which has invested more than $1 billion in many Musk companies over the last year, including SpaceX, xAI, and X, according to Pitchbook statistics.
Even while Musk looks to the skies, xAI is expanding swiftly on Earth. Mississippi officials have recently unveiled plans for a $20 billion data center near the Tennessee border. The facility, dubbed MACROHARDRR—a possible dig at Microsoft—will be the company’s third in the Memphis area.
Finally, Musk believes the combined company will help further another long-held ambition: colonizing other planets as a shield against world calamity. Speaking at the World Economic Forum in Davos last week, he referred to humanity as “a tiny candle in a vast darkness,” warning that civilization must spread beyond Earth to survive.
