SpaceX Acquires xAI

SpaceX has acquired artificial intelligence company xAI, bringing the two Elon Musk–backed firms together in a move aimed at building a vertically integrated technology platform spanning AI, space launch, satellite communications, and global connectivity.

The acquisition combines SpaceX’s rocket and satellite capabilities with xAI’s artificial intelligence research, positioning the group to pursue what it describes as large-scale, space-based computing as a long-term solution to the growing energy and infrastructure demands of AI.

According to SpaceX, current advances in artificial intelligence rely heavily on terrestrial data centres, which require vast amounts of electricity and cooling. The company argues that global power demand for AI systems cannot be sustainably met on Earth without placing increasing strain on communities, power grids, and the environment.

As a result, SpaceX is advancing the concept of orbital data centres powered by near-continuous solar energy. By placing compute infrastructure in space, the company says it could dramatically expand AI computing capacity while reducing ongoing operational and maintenance costs associated with ground-based facilities.

Central to this strategy is Starship, SpaceX’s next-generation heavy-lift launch vehicle. The company said Starship will begin deploying more powerful Starlink satellites this year, with each launch delivering more than 20 times the capacity of current Falcon rocket missions. Starship is also expected to deploy the next generation of direct-to-mobile satellites, aimed at providing global cellular coverage.

SpaceX estimates that a future constellation of large-scale AI satellites could add significant computing capacity each year. The company projects that launching one million tons of satellites annually, each generating 100 kilowatts of compute power per ton, could add up to 100 gigawatts of AI compute capacity per year, with a longer-term pathway toward even larger-scale deployment.

The company believes that within two to three years, space-based computing could become the lowest-cost source of AI compute, potentially accelerating AI model training, scientific research, and technological innovation.

SpaceX said the planned AI satellite constellation would build on existing space sustainability practices used in its broadband systems, including controlled end-of-life disposal. Beyond Earth orbit, the company also outlined longer-term ambitions to use Starship to support lunar and Martian operations, including manufacturing infrastructure on the Moon that could enable deeper space deployment.

The acquisition of xAI signals SpaceX’s intent to tightly integrate launch, connectivity, and artificial intelligence as it pursues its broader goal of expanding human activity beyond Earth.