Elon Musk's SpaceX has acquired his artificial intelligence company xAI, aiming to build data centers in space powered by solar energy. The merger combines AI, rockets, and satellite technology to advance space-based computing. Musk envisions this as a step toward lower-cost AI generation off Earth within a few years.
Elon Musk announced that SpaceX is acquiring xAI, the AI firm he founded which also owns the social media platform X (formerly Twitter). In a post on the SpaceX website, Musk described the combined entity as "the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world's foremost real-time information and free speech platform."
The acquisition addresses concerns over Earth-based data centers' massive electricity demands and environmental impact. Musk stated that the plan involves using solar power for orbital facilities to train AI models and spur scientific breakthroughs. "My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space," he said.
Valuations differ: Bloomberg reports the deal could value Musk's companies at $1.5 trillion, while The New York Times estimates closer to $1 trillion. SpaceX plans a public offering following the merger, described as the largest in history.
A separate report mentions Musk's ambition for a 'sentient sun' constructed from a million satellites, though details remain unclear.
The merger may affect users of Starlink and X. Starlink recently updated its privacy policy to use data from its 9 million users for AI training unless they opt out. Mahdi Eslamimehr, executive vice president at Quandary Peak Research, warned: "The use of personal data from its 9 million users for AI training unless they explicitly opt out is a stark reminder of the trade-offs in our increasingly connected world." He cautioned about a single entity controlling internet access, social media, and AI models, especially given the controversial history of xAI's Grok chatbot.
Eslamimehr suggested the move competes with rivals like OpenAI and Anthropic, potentially enabling AI assistants and real-time translation unbound by earthly constraints. Cost savings from solar power and space cooling could lower subscription prices, he added.
SpaceX did not immediately respond to comment requests. Recently, the company promised Gigabit internet speeds via its V3 Starlink satellites.
