SpaceX Acquires xAI to Build Orbital AI Data Centers

SpaceX has acquired xAI, Elon Musk’s artificial intelligence company, in a huge deal that makes SpaceX the most valuable private company in the world. This comes just months after xAI merged with Musk’s social media platform X, formerly known as Twitter, back in March. According to The New York Times, SpaceX is now worth more than $1 trillion with X and xAI under its control. Bloomberg reports that SpaceX plans to go public later this year through an initial public offering, or IPO, which could raise up to $50 billion.

On Tuesday, Musk shared a statement about the exciting plans ahead. He said SpaceX and xAI aim to build “a sentient sun to understand the Universe and extend the light of consciousness to the stars.” In simpler terms, Musk wants to move AI computing into space. He believes AI relies too much on big data centers on Earth, which will run out of the planet’s resources soon. Instead, the companies plan to launch a constellation of a million satellites that act as orbital data centers. These would power AI tools for people everywhere, using energy like the sun’s but in space.

Musk thinks this could start producing AI computing power in just two to three years. Experts doubt it will work so fast, but the idea ties into SpaceX’s strengths in rockets and satellites. The New York Times notes that SpaceX wasn’t planning orbital data centers for AI until Musk tweeted about it in early November. Now, with xAI’s help, which is already building data centers in the U.S., things are moving quickly. SpaceX even filed with the Federal Communications Commission recently for an orbital data center system.

xAI itself is worth $230 billion after its latest funding round in January. But Bloomberg says it might only make about $2 billion in revenue this year. Still, joining SpaceX boosts its reach hugely.

This deal also connects SpaceX to X, Musk’s social media site that’s faced a lot of trouble. Since Musk bought it in 2022, X has upset advertisers and lost users. It’s now in the middle of international probes over its AI chatbot, Grok. Last month, the Grok account on X apologized for creating and sharing an AI image of two young girls, aged about 12 to 16, in sexualized clothes based on a user’s request. Wired reported that Grok was making thousands of non-consensual nude images of real people every day.

X responded by limiting Grok’s image generation to paying subscribers only. But The Verge says it’s still easy to get Grok to create undressed images of men from user-uploaded photos. These issues make the merger controversial, linking SpaceX’s space ambitions to X’s problems.

Whether Musk can pull off orbital AI data centers remains to be seen. Earth-based data centers guzzle energy and water, so space could solve that. SpaceX’s Starlink satellites already show they can handle huge networks in orbit. A million satellites would be massive, but it fits Musk’s big dreams, like colonizing Mars. Success could change how AI grows, making it unlimited by Earth’s limits.

For now, the $1 trillion SpaceX stands as a powerhouse. Investors watch closely for the IPO. If it raises $50 billion, it would fund wild projects like the “sentient sun.” Musk’s vision mixes space travel, AI, and social media in one giant company. Challenges like regulations, tech hurdles, and X’s scandals loom large. But if anyone can try, it’s Musk.

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