Elon Musk has announced the merger of SpaceX, the space company he founded, with his artificial intelligence (AI) company xAI. With SpaceX preparing for an initial public offering (IPO) in the second half of this year (July–December), an ultra-large “space AI data center giant” with a combined corporate value of USD 1.25 trillion (approximately KRW 1,810 trillion) is set to emerge.

On 2 February (local time), SpaceX posted a statement on its website under Musk’s name, officially confirming the acquisition of xAI. Musk declared, “Through the acquisition, we have built the most ambitious vertically integrated innovation engine on Earth (and beyond), spanning AI, rockets, space-based internet, and direct communication with mobile devices.” Musk serves as chief executive officer (CEO) of both companies.

● Musk: “AI computation in space within 2–3 years”

Explaining the background of the merger and acquisition, Musk said, “The development of AI technology currently relies on large-scale terrestrial data centers that require massive amounts of power and cooling infrastructure,” adding, “In the long term, space-based AI is the only way to scale.” He indicated that the decision to acquire xAI was driven by the goal of building “space data centers” that use virtually limitless solar energy as a power source and require almost no cooling due to the characteristics of outer space.

SpaceX has already applied to the US Federal Communications Commission (FCC) for the launch of 1 million satellites in order to build space data centers. Musk said the same day, “If we launch 1 million tons of satellites each year with a computational capacity of 100 kW (kilowatts) per ton, we can add 100 GW (gigawatts) of AI computing capacity annually without maintenance.” He argued that this would ultimately open the way to securing 1 TW (terawatt) of annual computing capacity from space. “By my estimate, within 2–3 years, the cheapest place to perform AI computation will be space,” he added.

Foreign media, including Bloomberg News, reported, “This transaction values SpaceX at USD 1 trillion and xAI at USD 250 billion.” Citing an anonymous internal source, Bloomberg reported that the merger and acquisition will be carried out through a stock-swap arrangement between the two companies.

● SpaceX to offset massive xAI development costs

With the integration of the two companies, social networking service (SNS) X (formerly Twitter), AI chatbot “Grok,” rockets, and the Starlink satellite internet service will all come under one roof. The combination is expected to generate “synergies” across data, AI, and space infrastructure.

In particular, analysts say the merger could inject capital, talent, and computing power into xAI, which has been incurring enormous development costs. Musk acquired the SNS Twitter in 2022, renamed it X, and in 2023 merged it with his AI startup xAI to pursue AI development. xAI, which currently develops and operates the chatbot Grok, is spending USD 1 billion every month and has been dubbed a “money pit.” Nevertheless, it is competing against powerful rivals such as OpenAI, Anthropic, and DeepMind, creating a need for even greater investment.

SpaceX is regarded as one of Musk’s most successful ventures. The company has deployed more than 9,000 Starlink satellites into Earth orbit and is generating revenue by providing communications services worldwide. As a result, there is growing expectation that SpaceX’s solid business foundation will offset xAI’s massive development expenditures.

Popular News