Elon Musk is taking a bold step to unify his space exploration and artificial intelligence ambitions, announcing a merger of key ventures ahead of what is widely expected to be a major initial public offering later this year.
On Monday, SpaceX revealed it had acquired xAI, Musk’s artificial intelligence company, in a move that brings several of his flagship businesses under one umbrella. The deal effectively combines SpaceX, xAI’s AI chatbot Grok, satellite communications firm Starlink, and Musk’s social media platform X, as the billionaire seeks to strengthen his position across both the aerospace and AI sectors.
Central to Musk’s vision is the development of artificial intelligence infrastructure beyond Earth. He has repeatedly argued that placing data centres in space could dramatically reduce the immense electricity and resource costs associated with running AI systems on the ground.
“In the long term, space-based AI is obviously the only way to scale,” Musk wrote in a statement published on SpaceX’s website, pointing to the constant availability of solar power. “It’s always sunny in space!”
He further estimated that within the next two to three years, generating AI computing power in space could become cheaper than doing so on Earth.
While SpaceX moves in this direction, it will face competition from other technology giants. Google, for instance, is working on Project Suncatcher, a research initiative aimed at launching solar-powered satellites equipped with AI chips, with a prototype expected as early as next year.
However, Musk’s optimism is not universally shared. Microsoft president Brad Smith recently expressed scepticism about the viability of space-based data centres, suggesting companies are unlikely to shift operations from land to low-Earth orbit in the near term.
The merger also comes amid intense competition in the artificial intelligence sector. Musk founded xAI in 2023 as a rival to OpenAI, the company he helped establish more than a decade ago but later fell out with. Grok, xAI’s flagship product, is positioned as an alternative to ChatGPT, as OpenAI itself moves towards a potential IPO.
Beyond AI and space, Musk is simultaneously reshaping Tesla’s future. With car sales slowing, the electric vehicle maker is pivoting towards self-driving taxis and humanoid robots powered by artificial intelligence. Tesla recently announced a $2 billion investment in xAI, further highlighting the growing overlap between Musk’s companies.
This is not the first time Musk has merged operations across his business empire. Tesla acquired SolarCity in 2016, and more recently, xAI purchased X, formerly known as Twitter. Speculation on Wall Street has since intensified about the possibility of a broader consolidation of Musk’s ventures, with some investors even suggesting a future merger between Tesla and SpaceX.
According to Forbes, Musk’s net worth stands at $768 billion. His portfolio also includes Neuralink, a brain implant company, and the Boring Company, which focuses on underground transportation tunnels.
Details of SpaceX’s acquisition of xAI were not disclosed. Among the external investors involved is 1789 Capital, a fund linked to Donald Trump Jr., which has invested more than $1 billion across several Musk companies over the past year, including SpaceX, xAI and X, according to Pitchbook data.
Even as Musk looks to the skies, xAI continues to expand rapidly on Earth. Mississippi officials recently announced plans for a $20 billion data centre near the Tennessee border. The facility, named MACROHARDRR—a likely jab at Microsoft—will be the company’s third in the greater Memphis area.
Ultimately, Musk says the combined company could help advance another long-held ambition: the colonisation of other planets as a safeguard against global catastrophe. Speaking at the World Economic Forum in Davos last week, he described humanity as “a tiny candle in a vast darkness,” warning that civilisation must expand beyond Earth to ensure its survival.
Melissa Enoch
Follow us on:
