Elon Musk’s SpaceX Is Acquiring xAI With Big Plans for Data Centers in Space

Two of Elon Musk’s companies are merging to build data centers in space, according to a post on the SpaceX website. The rocket and satellite company has acquired xAI, Musk’s artificial intelligence company, which also owns the social media platform X (formerly Twitter).

In the post, Musk said the combined company is “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.”

SpaceX is planning a public offering, and the acquisition, the largest in history, could place the value of Musk’s company at $1.5 trillion, according to Bloomberg, which first reported on the deal. The New York Times estimates the value as closer to $1 trillion.

In the post, Musk cited concerns about Earth-based data centers, including their huge electricity needs and the “hardship on communities and the environment” they pose. He said the acquisition is part of a plan to use solar power to run data centers and space-based facilities that would train AI models and drive scientific breakthroughs. 

“My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space,” Musk said.

A representative for SpaceX did not immediately respond to a request for comment.

SpaceX recently promised Gigabit internet speeds from space with its V3 Starlink satellites.