SpaceX acquires xAI as Elon Musk claims space-based AI is the future and blasts terrestrial power grids as a ‘hardship’ that will doom humanity

Elon Musk just made a massive move to consolidate his sprawling tech empire, announcing that his spacecraft and satellite company, SpaceX, has officially acquired his artificial intelligence firm, xAI, as per The Hill. Musk stated that the merger forms “the most ambitious, vertically-integrated innovation engine on (and off) Earth.”

This new super-company combines cutting-edge AI development, rockets, the world-spanning Starlink space-based internet network, direct-to-mobile device communications, and even the world’s foremost real-time information and free speech platform, X. When you put all those pieces together, you’re talking about a closed-loop system that controls everything from the data generation to the physical hardware launching it into orbit.

Musk noted that current AI advances rely heavily on giant terrestrial data centers that need immense amounts of power and cooling. This demand is creating a difficult situation for the planet and the communities surrounding these facilities. He feels strongly that the global electricity demand for AI simply “cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.” He argues that space-based AI is “obviously the only way to scale” in the long term.

It is an absolutely mind-boggling scale of infrastructure, and it shows how serious Musk is about moving AI off-world

It’s one thing to talk about building data centers in space, but it’s another thing entirely to act on it. This plan is already moving forward rapidly. Just days before the acquisition announcement, SpaceX filed a request with the Federal Communications Commission for approval to launch a whopping million satellites. These satellites are specifically designed to power and support these orbital data centers. .

This acquisition also reorganizes some complicated business structures. Before moving under the SpaceX umbrella, xAI had merged with X back in March. That deal was massive, valuing the AI firm at a hefty $80 billion, while the social media platform was valued at $33 billion.

The timing of this latest merger is interesting because SpaceX is reportedly getting ready to go public later this year. Integrating xAI’s cutting-edge AI capabilities right before a potential public offering could certainly make the space company look even more attractive to investors. After all, they wouldn’t just be buying rockets and internet access; they’d be buying the future of self-sustaining, space-based AI infrastructure.

This vertical integration is a significant move that could drastically change how the market views space exploration companies and shape the technologies of the future.