Elon Musk has announced the absorption of his AI company xAI into SpaceX, his space firm, to develop data centers in orbit. The merger aims to meet the growing electricity demand for AI by combining space-based solar power and orbital infrastructure. The project aligns with Musk's broader ambitions for space exploration.
Billionaire Elon Musk revealed on Monday the integration of xAI, which holds the social network X (formerly Twitter), into SpaceX. This acquisition forms 'the most ambitious vertically integrated engine of innovation on Earth (and beyond), combining AI, rockets, space internet, direct-to-mobile communications, and the world's most important real-time information and free speech platform,' according to a message posted on SpaceX's website.
Musk justifies the merger as a key step for SpaceX's 'next chapter': building giant photovoltaic power plants in orbit, more efficient than on Earth, paired with AI data centers. He calls this project a 'sentient sun,' tied to his goals of establishing autonomous bases on the Moon, a civilization on Mars, and expansion across the universe. 'The global demand for electricity for AI simply cannot be met with terrestrial solutions, even in the short term, without imposing hardships on communities and the environment,' he explains. For Musk, 'space-based AI is obviously the only way to scale up in the long term.' With Starship launches every hour carrying 200 tons per flight, millions of tons could be delivered annually to orbit.
No financial details or deployment timeline were specified. According to Bloomberg, the merged company would target a $1,250 billion valuation, with shares at $527 each. An anonymous source states xAI would become a 100% subsidiary of SpaceX. The deal precedes SpaceX's IPO to raise $50 billion at around $1,500 billion valuation, per the Financial Times. xAI, which runs the Grok chatbot and absorbed X in 2025, was valued at $230 billion in January. Musk describes a constellation of one million satellites as orbital data centers, the first step toward a Type II civilization on the Kardashev scale.
