Elon Musk has merged SpaceX and XAI as part of an ambitious scheme to build space-based data centres to power the future of artificial intelligence.
In a statement, the SpaceX CEO confirmed that the two firms were now one company.
“SpaceX has acquired xAI to form the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications, and the world’s foremost real-time information and free speech platform,” read a statement.
“@SpaceX & @xAI are now one company,” said Elon.
The merger comes after Musk’s electric car company, Tesla, announced a $2bn investment in xAI last month.
Musk told Tesla investors that he envisioned xAI functioning as an orchestra conductor for Tesla factories employing autonomous robots.
He also said it would stop manufacturing two car models in favour of producing robots, one of the most significant pivots the company has made.
SpaceX operates the Falcon and Starship rocket programmes, while xAI is best known for developing the AI-powered Grok chatbot.
Elon Musk Merges SpaceX and xAI to Launch AI Data Centres
Musk said that the merger will help to address the emerging question of how to meet the power-hungry demands of artificial intelligence by providing the solution to the energy needs faced by AI firms.
“AI demand will require immense amounts of power and cooling that are not sustainable on Earth without imposing hardship on communities and the environment,” he said.
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He added that it will bring several of Musk’s space, artificial intelligence, internet, and social media projects under one roof.
“In the long term, space-based AI is obviously the only way to scale,” he wrote.
Elon Musk said that launching AI satellites from Earth would be the immediate focus, adding that the deal would also help advance his bigger ambitions.
“The capabilities we unlock by making space-based data centres a reality will fund and enable self-growing bases on the Moon, an entire civilisation on Mars and ultimately expansion to the Universe,” he wrote.
SpaceX highlighted that the Current advances in AI are dependent on large terrestrial data centres, which require immense amounts of power and cooling.
The company stressed that global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.
“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilisation currently uses.”
About XAI
xAI began as a segment of X, formerly known as Twitter, after Musk acquired the social media platform in 2022, using its access to real-time text and information as AI training data.
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By the end of 2025, it had become independently incorporated and was valued higher by investors than X.
Its main product is Grok, which has been scrutinised several times for its AI image-generation feature.
Previously, the European Commission and UK watchdog Ofcom both launched investigations into X over concerns that Grok was used to create sexualised images.
However, xAI said in January that it had imposed restrictions on Grok users that limit image editing.
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