San Francisco (United States) (AFP) – Elon Musk has announced that his rocket company SpaceX will take over his artificial intelligence outfit xAI, as he seeks to raise billions of dollars for his science fiction-worthy outer space projects. Musk wrote on the SpaceX website Monday that the merger further entwining his business interests would create “the most ambitious, vertically-integrated innovation engine on (and off) Earth”. He cited capabilities in “AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform”.
SpaceX has set the pace in the space launch market, offering reusable rockets that vastly reduce the cost of putting satellites into orbit and itself owning the largest satellite constellation, Starlink. The company is set for a stock market listing this year widely expected to be the biggest in history, with The Financial Times reporting the initial public offering (IPO) could come in June and aim to bring in $50 billion. Musk called SpaceX’s absorption of xAI “not just the next chapter, but the next book” in what he said was the companies’ “mission” to “make a sentient sun”.
Behind the science fiction language is a plan to use SpaceX’s rockets to launch solar-powered, satellite-based data centers to develop and run future AI models. The merger comes as funding for the AI buildout embraced by big tech companies begins to show signs of tension. “Global electricity demand for AI simply cannot be met with terrestrial solutions…The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space,” Musk wrote. The announcement did not disclose financial terms of the acquisition or provide a timeline for initial satellite deployments. But the project fits into Musk’s long-term ambition to build colonies on the Moon and Mars and is “a first step towards becoming a Kardashev II-level civilization”, he wrote. Coined in the 1960s by a Soviet astronomer, the futurist term refers to a civilization able to use all of the energy from its home system’s star.
More prosaically, “Musk announced during last week’s Tesla results that he would be pivoting the business away from electric vehicles to automation and artificial intelligence, and this will be true of his space travel ambitions too,” said Emma Wall, chief investment strategist at Hargreaves Lansdown. “There are technological synergies to be made across all his businesses” but “what will be key is the market’s view of the valuation”, Wall added.
Suggested valuations for the merged SpaceX and xAI entity vary, with Bloomberg reporting $1.25 trillion and The Financial Times $1.5 trillion. A January fundraising round valued xAI, which owns the X social network and the Grok chatbot, at $230 billion, while SpaceX was estimated at around $800 billion late last year. The combined company could pool capital, computing resources, and talent. Musk had previously opposed an IPO for SpaceX because he had not enjoyed the required scrutiny of publicly traded carmaker Tesla. He also argued that the market’s desire for financial returns was at odds with his ultimate goal of settling Mars.
But the company’s latest priorities will require significant investment. SpaceX is currently developing the biggest rocket in history, Starship, designed to carry future manned missions into space. Amazon founder and fellow multibillionaire Jeff Bezos is determined to compete with Musk using the New Glenn rocket built by his Blue Origin company. The two are at odds over NASA’s Artemis programme, a new generation of Moon missions, with the American space agency saying it could turn to other suppliers than SpaceX over delays.
Such concerns did not figure in Musk’s statement, as he wrote that SpaceX aimed to launch one million satellites operating as data centers using its Starship rocket. The South African-born billionaire claimed that SpaceX would soon achieve launch rates of one flight per hour carrying 200 tons of payload. That would be a massive step up from the roughly one launch every other day the company achieved in 2025, mostly with its smaller Falcon rockets.
© 2024 AFP
