SpaceX buys xAI: Combined company estimated to be worth $1.25 trillion
It is a move that only Musk can make, and of course he wants to use it to initiate the largest IPO in history: SpaceX has acquired xAI and, according to Bloomberg sources, is aiming for a public offering of the combined companies, in which shares are expected to be issued at a price of around 527 dollars. The valuation of the combined group would amount to 1.25 trillion dollars.
xAI already has bought X. SpaceX was recently valued at $800bn in a secondary stock sale, while xAI was valued at $230bn in a recent funding round.
The company, or rather mastermind Elon Musk, justifies the merger with the necessity to unite artificial intelligence, rocket technology, satellite-based internet, and mobile communications in a vertically integrated structure. The integration aims to relocate computing capacity for AI applications into space, where unlimited solar energy and space are available.
Current advances in artificial intelligence are based on large terrestrial data centers that require enormous amounts of electricity and cooling. According to the company’s own assessment, the global electricity demand for AI systems cannot be met in the short term through earth-based solutions without burdening communities and the environment. In the long term, space-based AI infrastructure appears to be the only way to scale, as even utilizing one millionth of solar energy would require more than a million times as much energy as civilization currently consumes.
Satellites as orbital data centers
According to Musk, SpaceX plans to build a constellation of one million satellites that will serve as orbital data centers. These satellites utilize nearly constant solar energy with minimal operating and maintenance costs, transforming the possibilities for scaling computing power. The company describes this step as the first path toward a Kardashev Type II civilization, which would be capable of harnessing the full energy of the sun. The Starlink constellation serves as a precursor: In 2025, the most productive year in space history to date, approximately 3,000 tons of payload reached orbit, primarily Starlink satellites on Falcon rockets.
The Starship rocket is intended to launch hourly in the future, each time transporting 200 tons, which would enable millions of tons of cargo per year. According to the company’s calculations, launching one million tons of satellites per year, each generating 100 kilowatts of computing power per ton, would add 100 gigawatts of AI computing capacity annually, without ongoing operational or maintenance requirements. Ultimately, there exists a path to launching one terawatt per year from Earth. SpaceX estimates that within two to three years, space will be the most cost-effective way to generate AI computing power.
Lunar bases and electromagnetic accelerators
Starship’s capabilities enable operations on other celestial bodies through technologies such as in-space fuel transfer. The company plans to land massive amounts of cargo on the Moon and establish a permanent presence there for scientific and manufacturing purposes. Factories on the Moon could utilize lunar resources to manufacture satellites and transport them deeper into space. Through the use of an electromagnetic mass accelerator and lunar manufacturing, it would be possible to send 500 to 1,000 terawatts per year of AI satellites into space, thereby utilizing a significant percentage of solar energy.
According to the company’s representation, space-based data centers are intended to finance and enable self-growing bases on the Moon, a civilization on Mars, and ultimately expansion into the universe. With a targeted valuation of 1.25 trillion dollars, the merged company would rank among the most valuable corporations worldwide and possess the financial resources to advance these ambitious plans for relocating computing infrastructure and human presence into space.
