Elon Musk Rolls His AI Startup Into SpaceX, Creating the World's Most Valuable Company

"In a blog post, Musk said the acquisition was warranted 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 power its AI ambitions. "In the long term, space-based AI is obviously the only way to scale," Musk wrote. "The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called 'space' for a reason.""

"The deal, which pulls together two of Musk's largest private ventures, values the combined entity at $1.25 trillion, making it the most valuable private company in the world, according to a report from Bloomberg. SpaceX was in the process of preparing to go public later this year before the xAI acquisition was announced. The space firm's plans for an initial public offering are still on, according to Bloomberg."

"This isn't the first time Musk has sought to consolidate parts of his vast business empire, which is largely privately owned and includes xAI, SpaceX, the brain interface company Neuralink, and the tunnel transportation firm the Boring Company. Last year, xAI acquired Musk's social media platform X, formerly known as Twitter, in a deal that valued the combined entity at more than $110 billion. Since then, xAI's core product, Grok, has become further integrated into the social media platform."

SpaceX is acquiring xAI to address projected global electricity demand for AI that cannot be met with terrestrial solutions by building data centers in space. Space-based infrastructure is presented as a way to scale resource-intensive AI workloads using vast power and room. The combined entity is valued at $1.25 trillion and would be the most valuable private company. SpaceX's plans for an initial public offering remain on track despite the acquisition. Prior financing and internal deals placed SpaceX and xAI valuations near $800 billion and $230 billion respectively. xAI has integrated its Grok product into the X platform.

Read at WIRED