Elon Musk merges SpaceX with xAI (and X)

5 days ago 9

Jay Peters

is a senior reporter covering technology, gaming, and more. He joined The Verge in 2019 after nearly two years at Techmeme.

Elon Musk is merging two of the companies that he leads, SpaceX and xAI (which also owns X), into one. According to an announcement from Musk:

SpaceX has acquired xAI to form 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. This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!

Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. 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.

In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!

The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called “space” for a reason.

As part of the announcement, Musk discusses the need for a new constellation of satellites designed for AI compute:

My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space. This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.

This new constellation will build upon the well-established space sustainability design and operational strategies, including end-of-life disposal, that have proven successful for SpaceX’s existing broadband satellite systems.

He also claims that:

The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe.

The merger follows SpaceX’s filing with the FCC last week to get approval to launch a constellation of as many as 1 million data center satellites orbiting Earth. The deal also brings SpaceX and X, which is under intense scrutiny and an investigation in the EU because of the nonconsensual sexualized deepfakes generated by Grok, into one company.

The combined company of SpaceX and xAI has a valuation of $1.25 trillion, and SpaceX still plans to IPO later this year, Bloomberg reports. SpaceX earned about $8 billion in profit last year, according to Reuters.

The deal between SpaceX and xAI was completed on Monday, CNBC says. Last week, Reuters and Bloomberg reported that the potential deal was on the table, with Bloomberg also reporting that SpaceX was “considering” merging with Tesla, which is also led by Musk.

As part of its earnings reported last week, Tesla disclosed that it would be investing $2 billion in xAI.

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