Elon Musk is officially consolidating his aerospace and artificial intelligence companies in the interest of cost-efficiency. The founder announced on Monday that SpaceX acquired xAI, a move that created the single most valuable privately owned company in the world, worth over $1 trillion, according to reporting by The New York Times.
Following the merger of social media platform X into AI company xAI, this acquisition serves to provide further financial cushion for Musk’s businesses amid the heightening costs of their AI-focused goals, the NYTimes article mentioned. The new company’s portfolio now encompasses the Grok chatbot, a social media platform and rockets.
SpaceX claims this move is aimed at helping the company develop space-based data centers that will harness energy directly from the sun via satellites to power AI-driven applications on Earth. Starting this year, the combined company plans to launch V3 Starlink satellites into orbit with its Starship rocket, with plans to ramp up to launching as much as 1 million tons of satellites per year.
The idea is that since global electricity demand for AI cannot be met without harming communities or the environment, this will add 100 gigawatts of AI compute capacity annually, granting companies a more cost-efficient way of training their AI models and processing data.
“My estimate is that within two to three years, the lowest cost way to generate AI compute will be in space,” SpaceX founder Elon Musk wrote in a company blog. “This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.”
The new constellation of satellites will be designed for sustainability and follow the same operational strategies that have proven successful for SpaceX’s existing broadband satellite systems, including their end-of-life-disposal process.
