Elon Musk’s SpaceX officially acquires Elon Musk’s xAI, with plan to build data centers in space

SpaceX has acquired Elon Musk’s artificial quality startup, xAI, creating the world’s astir invaluable backstage company, the spaceflight institution announced Monday.

Musk, who is besides the CEO of SpaceX, wrote successful a memo posted to the rocket company’s website that the merger is mostly astir creating space-based information centers — an thought helium has go fixated connected implicit the past fewer months.

“Current advances successful AI are babelike connected ample terrestrial information centers, which necessitate immense amounts of powerfulness and cooling. Global energy request for AI simply cannot beryllium met with terrestrial solutions, adjacent successful the adjacent term, without imposing hardship connected communities and the environment,” helium wrote. (xAI has been accused of imposing immoderate of that hardship connected the communities adjacent its information centers successful Memphis, Tennessee.)

The tie-up values the combined institution astatine $1.25 trillion, according to Bloomberg News, which was archetypal to report the completed deal. SpaceX has been reportedly preparing an IPO for arsenic aboriginal arsenic June of this year. It’s unclear whether the merger volition impact that timeline. Musk did not code the IPO successful his nationalist memo.

The merger brings unneurotic 2 of Musk’s companies, each with its ain fiscal challenges. xAI is presently burning around $1 cardinal per month, according to Bloomberg. SpaceX, meanwhile, generates arsenic overmuch arsenic 80% of its gross from launching its ain Starlink satellites, according to Reuters. Last year, xAI acquired X, the societal media institution besides owned by Musk, with Musk claiming a combined institution valuation of $113 billion.

Musk wrote successful his memo that it volition instrumentality a changeless watercourse of galore — though helium did not specify however galore — satellites to make these space-based information centers, ensuring that SpaceX volition person an even-larger changeless watercourse of gross for the foreseeable future. (That gross loop apt looks adjacent much charismatic erstwhile you see that satellites are required to beryllium de-orbited each 5 years by the Federal Communications Commission.)

While abstraction information centers whitethorn beryllium the stated goal, SpaceX and xAI person precise antithetic near-term objectives.

SpaceX is presently trying to beryllium that its Starship rocket is susceptible of bringing astronauts to the satellite and Mars, portion xAI is competing with starring artificial quality companies similar Google and OpenAI. The unit connected xAI is truthful great, the Washington Post reported Monday, that Musk loosened restrictions connected the company’s chatbot Grok — which contributed to it becoming a instrumentality for making AI-generated non-consensual intersexual imagery of adults and children.

Musk is also the head of Tesla, The Boring Company, and Neuralink. Tesla and SpaceX previously invested $2 cardinal each successful xAI.