SpaceX Acquires xAI: Elon Musk’s Companies to Form the Most Ambitious, Vertically Integrated Innovation Engine
SpaceX has acquired xAI to integrate artificial intelligence with its aerospace operations. The merger focuses on launching a million-satellite constellation to serve as orbital data centres. By leveraging constant solar power in space, the company aims to overcome terrestrial energy limits, scaling AI compute to support humanity’s multi-planetary future and consciousness.
Mumbai, February 3: SpaceX has officially acquired xAI in a record-breaking merger that unifies Elon Musk’s aerospace and artificial intelligence ventures. The deal, which values the combined entity at approximately USD 1.25 trillion, marks the creation of what the company describes as the most ambitious vertically integrated innovation engine on and off Earth.
The strategic move combines SpaceX’s rocket technology and Starlink satellite network with xAI’s advanced computational models, including the Grok chatbot. By merging these assets, Musk aims to bypass terrestrial energy bottlenecks that have recently hindered the rapid scaling of large-scale AI data centres and cooling systems. Elon Musk’s SpaceX, Tesla and xAI Reportedly in Merger Talks Ahead of Potential IPO.
Space-Based AI Infrastructure Strategy
The core of this acquisition is a plan to move resource-intensive AI processing into orbit. SpaceX has already filed with the Federal Communications Commission for authorisation to launch a constellation of up to one million solar-powered satellites. These units will function as orbital data centres, leveraging near-constant solar energy available in space to power massive AI workloads.
By shifting compute tasks off-planet, the company intends to eliminate the environmental and communal strain caused by high electricity demands on Earth. Musk estimated that within two to three years, space-based AI will become the most cost-effective method for generating compute, as it avoids the rising costs of land-use and terrestrial power grids.
Kardashev Civilisation Goals
The mission statement accompanying the announcement highlights a long-term vision of becoming a Kardashev Type II civilisation, which is capable of harnessing the full energy output of the sun. This "sentient sun" project aims to extend the light of human consciousness by providing unprecedented intelligence processing capacity for billions of people. Elon Musk Claims xAI’s Grok Imagine 1.0 Generates More Images and Videos Than All Competitors Combined; Says Rapid Improvements Coming Every Week.
In the near term, the merger positions SpaceX for a potential initial public offering later in 2026, which analysts believe could be the largest in history. While the deal consolidates Musk's private empire, it notably excludes Tesla, which remains a separate public entity despite having recently invested USD 2 billion into xAI.
(The above story first appeared on LatestLY on Feb 03, 2026 07:52 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).