SpaceX CEO Elon Musk says he’s making space-based artificial intelligence the “immediate focus” of a newly expanded company that not only builds rockets and satellites, but also controls xAI’s generative-AI software and the X social-media platform.
That’s the upshot of Musk's announcement that SpaceX has acquired xAI. The Information quoted unnamed sources as saying that xAI was valued at $250 billion, while SpaceX’s value was set at a trillion dollars. That would make SpaceX the most valuable private company in the world — but because Musk held a controlling interest in both companies, those valuations may be somewhat subjective.
Ross Gerber, an investment adviser who tracks Musk’s business dealings, quipped on X that the world’s richest person decided to go ahead with the acquisition after “a short negotiation with himself.”
Musk said the combination of SpaceX and xAI would facilitate the creation of a new constellation of orbital data centers. SpaceX is already seeking approval from the Federal Communications Commission to put up to a million satellites in low Earth orbit for such a constellation.
Musk said moving AI processing power into outer space would address the big challenges that ground-based data centers face: the rapidly rising need for electricity to keep the computers running, and the need for water to cool down the equipment.
“By directly harnessing near-constant solar power with little operating or maintenance costs, these satellites will transform our ability to scale compute. It’s always sunny in space!” Musk wrote. “Launching a constellation of a million satellites that operate as orbital data centers is a first step towards becoming a Kardashev II-level civilization, one that can harness the sun’s full power, while supporting AI-driven applications for billions of people today and ensuring humanity’s multiplanetary future.”
SpaceX’s satellite production facility in Redmond, Wash., is already turning out roughly 70 satellites per week for the company’s Starlink broadband internet constellation, and Musk said the pace would accelerate once SpaceX’s Starship super-rocket goes into service.
“The sheer number of satellites that will be needed for space-based data centers will push Starship to even greater heights,” he wrote. “With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year, enabling an exciting future where humanity is out exploring amongst the stars.”
Musk said orbital data centers would provide “the lowest cost way to generate AI compute” within two to three years.” He suggested that future AI satellites could be built on and launched from the moon.
“By using an electromagnetic mass driver and lunar manufacturing, it is possible to put 500 to 1,000 TW/year of AI satellites into deep space, meaningfully ascend the Kardashev scale and harness a non-trivial percentage of the sun’s power,” Musk wrote. “The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the moon, an entire civilization on Mars and ultimately expansion to the universe.”
Musk is thought to be preparing the way for an initial public offering of SpaceX shares in the months ahead — and some industry observers said the acquisition and the proposal to put a million satellites in orbit may be part of a plan to pump up interest in those shares.
“I assume the 1 million figure is convenient for publicity and the IPO, and essentially fantasy at this point,” Jim Cashel, author of “The Great Connecting: The Emergence of Global Broadband and How That Changes Everything,” said in an email.
Martin Peers, co-executive editor of The Information, said “there’s no question this move is financially motivated.”
“Musk may be the richest man in the world, but he is facing the same financial realities the leaders of other AI startups face: It’s very difficult to compete in AI development with deep-pocketed tech giants like Google and Meta Platforms, which own cash machines in their advertising businesses,” Peers wrote in The Briefing.
Peers said Musk is counting on investors to buy into his grand vision and throw a lifeline to xAI, which merged with X last year and has been facing financial troubles.
“He may be able to pull it off — he has a Pied Piper-like ability with investors. But he may run into skepticism on the subject of data centers in space,” Peers said. “As we wrote in this deep dive on the subject last year, ‘there’s a head-spinning array of technical and financial impediments to making’ data centers work in space, ‘from guarding their computers against radiation, to maintaining them, to affording the expense of getting all that hardware into orbit in the first place.’ The idea of launching AWS-style data centers in space, skeptics say, was science fiction.”
This report was originally published on Alan Boyle's Cosmic Log.
