new york – Elon Musk plans to combine his space exploration and artificial intelligence businesses into a single company ahead of the business’s major initial public offering later this year.
His rocket venture SpaceX announced on Monday that it had acquired xAI in a bid to help the world’s richest man control the rocketry and artificial intelligence businesses. The deal will bring together several of his services, including AI chatbot Grok, satellite communications company Starlink, and social media company X.
Musk has repeatedly talked about the need to accelerate the development of technology that will allow data centers to operate in space. He believes this can overcome the enormous cost of electricity and other resources in building and running AI systems on Earth.
This is a goal that Musk hinted at in his merger announcement, and a merger could make it easier to achieve.
“In the long term, it’s clear that space-based AI is the only way to scale,” Musk wrote on SpaceX’s website on Monday, adding, “It’s always sunny in space!” referring to solar power.
Musk said in his announcement that he predicts that “within a few years, the lowest-cost way to generate AI computing will be in space.”
SpaceX will be competing with Google in that space, but Google is working on a research project called Project Suncatcher to put AI computer chips on solar-powered satellites, with a prototype potentially launching as early as next year.
But Musk’s predictions about the near future of space-based AI supercomputers are not shared by many other companies building data centers, including Microsoft.
Asked about alternatives to building data centers in the U.S. amid growing community opposition, Microsoft President Brad Smith told The Associated Press last month: “I would be surprised if people moved from land to low-Earth orbit.”
Musk already faces stiff competition in the artificial intelligence space, competing with rivals like OpenAI, which is also aiming for an IPO. Musk’s dislike of OpenAI, which he helped found more than a decade ago, is part of what motivated him to launch xAI in 2023 and build a ChatGPT replacement called Grok.
Mr. Musk has similarly ambitious plans for Tesla, seeking to pivot the company whose car sales are shrinking and focus more on self-driving taxis and humanoid robots powered by artificial intelligence.
Tesla recently announced a $2 billion investment in xAI.
Mr. Musk has previously used his control over multiple companies to consolidate operations. Tesla acquired SolarCity 10 years ago. And recently, he had xAI acquire his social media platform X (previously called Twitter).
Wall Street has been buzzing in recent months about how the billionaire continues to merge many of his businesses into the giant Musk Corp., with some investors speculating that Tesla could also merge with SpaceX.
Forbes magazine estimates Musk’s net worth at $768 billion. He also owns a brain implant company called Neuralink and a tunneling business called Boring Company.
Terms of SpaceX’s acquisition of xAI have not been disclosed. Among the outside investors in both companies is a fund in which President Donald Trump’s son Don Jr. is a partner. The firm, 1789 Capital, has invested more than $1 billion in various Musk companies over the past year, including SpaceX, xAI and X, and has already liquidated some investments, according to data provider PitchBook.
While xAI pursues space data centers, it is also rapidly expanding on Earth. Mississippi state officials announced last month that the company would spend $20 billion to build a data center near the state border with Tennessee.
The data center will be called MACROHARDRR, likely a play on Microsoft’s name, and will be the third data center in the greater Memphis area.
Musk also hopes that the combined company will eventually help accomplish another goal he has talked about for years: the need to colonize other planets in case of natural or man-made disasters on Earth.
Speaking at the World Economic Forum in Davos last week, Musk considered humanity to be “a small candle in a vast darkness, a small candle of consciousness that is easily extinguished.”
