SpaceX has officially acquired artificial intelligence company xAI in a massive all-stock deal that values the combined entity at $1.25 trillion. The announcement came through a statement published on SpaceX’s website and signed by Elon Musk. It confirms the weeks of speculation around deeper integration between Musk’s companies.
With this acquisition, SpaceX brings artificial intelligence development, satellite networks, launch systems, and space-based internet under a single corporate structure. The move shows Musk’s long-term vision of taking AI computing beyond Earth, using space as the next frontier for large-scale data processing.
According to SpaceX, the core idea behind the acquisition is to solve one of the biggest problems facing AI today. It is the infrastructure limits on Earth. Modern AI models require enormous computing power, which depends on data centers that consume massive amounts of electricity and water for cooling. These constraints are becoming harder to manage as AI demand continues to rise globally.
Musk believes space could offer a more scalable alternative. In the statement, he said large-scale AI computing in space could become more cost-effective within the next two to three years. Space-based systems can rely on near-continuous solar energy. It will reduce dependence on land-based power grids and complex cooling setups.
xAI fits perfectly in this vision. By combining xAI’s models, research, and training needs with SpaceX’s satellite and launch infrastructure, the company wants to create a new kind of AI computing platform that is not tied to Earth.
SpaceX revealed that it is seeking permission to deploy up to one million satellites as part of its long-term plan. These satellites are expected to support not just internet connectivity, but also space-based computing and large-scale AI training.
This would be a dramatic expansion beyond Starlink’s current network. At present, Starlink operates more than 9,000 satellites and has already become a bigger revenue generator for SpaceX than its launch business. That steady cash flow could play a key role in funding xAI, which reportedly spends around $1 billion every month.
This merger further consolidates Elon Musk’s business empire. After acquiring Twitter in late 2022 and later merging it with xAI in a $33 billion deal, Musk is now placing AI, social platforms, and space infrastructure under fewer umbrellas.
The SpaceX and xAI merger sounds ambitious, even futuristic on paper. But its success will depend heavily on regulatory approvals, satellite deployment timelines, and whether space-based computing can truly compete with Earth-based data centers on cost and reliability.
There are also open questions. Training AI models in space introduces new technical challenges, including latency, maintenance, and security. Regulators may also scrutinize the scale of satellite deployments more closely, especially with concerns around space debris and orbital congestion.
