SpaceX acquires xAI as Musk builds orbital data centers ahead of $1 trillion IPO
SpaceX has acquired Elon Musk's artificial intelligence startup xAI, according to a company memo announcing the deal in an effort to combine rockets, satellite Internet, direct-to-mobile connectivity and AI into a single, integrated platform.
In the memo, Musk argues that AI scaling is limited by the power and cooling needs of terrestrial data centers and that space is the only long-term solution. The plan includes near-stationary solar-powered orbital data centers.
The memo also describes using Starship to lift more mass into orbit than current systems, adding significant computing power over time to building a larger satellite.
The announcement comes as SpaceX looks for a blockbuster public listing. A recent report cited by Reuters said SpaceX could raise up to $50 billion in a mid-June IPO at a valuation of $1.5 trillion, though the company has not officially confirmed the plan.
Various reports in recent days have revealed merger talks between SpaceX and xAI ahead of the IPO, with some putting the combined value at close to $1.25 trillion.
A related Reuters report highlighted an update to Starlink's privacy policy that would allow customers' data to be used to train AI models unless users opt out, a change that will become more significant as SpaceX and xAI integrate systems and data pipelines.
