SpaceX acquires xAI as Musk pitches orbital data centers ahead of $1 trillion IPO
SpaceX has acquired xAI, Elon Musk’s artificial intelligence startup, according to a company memo that frames the deal as an effort to combine rockets, satellite internet, direct-to-mobile connectivity, and AI into a single vertically integrated platform.
In the memo, Musk argues that AI scaling is constrained by the power and cooling demands of terrestrial data centers and pitches space as the long-term solution. The plan includes orbital data centers powered by near-constant solar energy.
The memo describes using Starship to lift far more mass to orbit than current systems, enabling a large satellite buildout that could add significant compute capacity over time.
The announcement arrives as SpaceX explores a blockbuster public listing. A recent report cited by Reuters said SpaceX has weighed a mid-June IPO that could raise up to $50 billion at roughly a $1.5 trillion valuation, though the company has not publicly confirmed the plan.
Separate reporting in recent days described merger discussions between SpaceX and xAI ahead of a potential IPO, with some coverage pegging a combined valuation closer to $1.25 trillion.
A related Reuters report also highlighted a Starlink privacy policy update that would allow customer data to be used for training AI models unless users opt out, a change that could become more consequential as SpaceX and xAI integrate systems and data pipelines.
