Elon Musk merged SpaceX with xAI (and X).

Elon Musk is merging the two companies he chairs, SpaceX and xAI (the owner of Platform X), into a single company. Musk said in his statement:

“SpaceX has acquired xAI to shape the most ambitious innovation engine on (and beyond) Earth, including artificial intelligence, rockets, the space-based Internet, direct communications with mobile devices, and the world’s leading real-time information and free speech platform. This marks not only the next chapter, but the next book in SpaceX and xAI’s mission: scaling up to create an intelligent sun to understand the cosmos and spread the light of consciousness to the stars!

Current advances in artificial intelligence depend on massive terrestrial data centers that require enormous amounts of power and cooling. The global electricity demand for AI simply cannot be met by terrestrial solutions, even in the short term, without inflicting suffering on communities and the environment.

In the long term, space-based AI is the only way to scale. Harnessing even one millionth of the sun’s energy would require more than a million times more energy than our current civilization uses! Therefore, the only logical solution is to move these resource-intensive efforts to a place with more power and space. “I mean, space is called ‘space’ for a reason.”

In part of the statement, Musk discusses the need for a new satellite system for AI computing:

“My guess is that in 2 to 3 years, the least expensive way to produce AI computing will be in space. This cost-effectiveness alone allows innovative companies to train their AI models and process data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and inventing technologies to benefit humanity.

“This new system will build on 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 claimed that:

“The capabilities we unlock by developing space-based data centers will finance and enable self-growing bases on the moon, a complete civilization on Mars, and ultimately expansion into space.”

The merger follows SpaceX’s application to the US Federal Communications Commission last week for approval to launch a system of 1 million data center satellites into Earth orbit. The deal also brings together SpaceX and X into a single company.

The combined company of SpaceX and xAI is valued at $1.25 trillion, and SpaceX still plans to do an initial public offering later this year. SpaceX earned about $8 billion in profit last year.

The deal between SpaceX and xAI was made on Monday (February 3). Last week, Reuters and Bloomberg reported that a possible deal was under consideration, and Bloomberg also reported that SpaceX was considering a merger with Tesla, which is also led by Musk.

As part of its earnings report last week, Tesla disclosed that it will invest $2 billion in xAI.