Elon Musk’s rocket and satellite company EspaceX acquires his Getting started with AI Xai, the centillionaire, announced on Monday. in a blog postMusk said the acquisition was justified because global electricity demand for AI cannot be met with “terrestrial solutions,” and Silicon Valley will soon need to build data centers in space to fuel its AI ambitions.
“In the long term, spatial AI is obviously the only way to scale,” Musk wrote. “So the only logical solution is to transport these resource-intensive efforts to somewhere with vast power and space. I mean, space is called ‘space’ for a reason.”
The deal, which brings together two of Musk’s largest private companies, values the combined entity at $1.25 trillion, making it the most valuable private company in the world, according to a report. report from Bloomberg.
SpaceX was preparing to go public later this year before the xAI acquisition was announced. The space company’s IPO plans are still on the table, according to Bloomberg.
In December, SpaceX told employees it would buy insider shares in a deal that would value the rocket company at 800 billion dollarsaccording to the New York Times. Last month, xAI announced that it had raised 20 billion dollars among investors, bringing the company’s valuation to around $230 billion.
This is not the first time Elon Musk has sought to consolidate parts of his vast business empire, which is largely private and includes xAI, SpaceX, brain interface company Neuralink and tunnel transport company The Boring Company.
Last year, xAI acquired Musk’s social media platform X, formerly known as Twitter, in a deal valuing the combined entity at more than $110 billion. Since then, xAI’s main product, Grok, has been further integrated into the social media platform. Grok features prominently in various features of X, and Musk has claimed that the app’s content recommendation algorithm is powered by xAI technology.
A decade ago, Musk also used shares of his electric car company Tesla to buy SolarCity, a renewable energy company run at the time by his cousin Lyndon Rive.
The acquisition of xAI demonstrates how Musk can use his vast network of companies to help fuel his own, often grandiose, visions of the future. Elon Musk said in his blog that SpaceX would immediately focus on launching satellites into space to fuel AI development on Earth, but eventually the space data centers it plans to build could power civilizations on other planets, such as Mars.
“This marks not only the next chapter, but the next book in SpaceX and xAI’s mission: to evolve to create a sentient sun to understand the Universe and extend the light of consciousness to the stars,” Musk said in the blog post.
