Move creates the world’s most valuable private enterprise
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Image: xAI
Elon Musk’s space company SpaceX has officially taken over the AI start-up xAI creating what couild be the world’s most valuable private enterprise.
In a memo on the SpaceX website, Musk wrote that the merger was mainly aimed at building data centres in space – an idea he has been increasingly committed to in recent months. He argues that current progress in artificial intelligence is heavily dependent on huge data centres on Earth, which require vast amounts of energy and cooling. According to Musk, the global electricity demand for AI on Earth may not even be met in the short term without severe consequences for local environments and communities.
By bringing xAI under the SpaceX umbrella, Musk is combining his AI activities with his space and satellite infrastructure. The plan is to build a constellation of satellites that can host data centres in space, allowing AI workloads to run more efficiently and sustainably than on Earth.
According to reports from Bloomberg, the merged company will be valued at around $1.25 trillion. SpaceX is also preparing for a possible stock market flotation (IPO) later this year, although it is still unclear whether the merger will have any impact on that.
XAI has been a costly venture in recent times: the company is said to be burning through around $1 billion in investment a month. SpaceX, by contrast, generates a large share of its revenue from launching Starlink satellites.
Through the takeover, Musk wants to tackle the enormous energy and cooling demands of AI infrastructure by moving part of it off Earth – something he sees as essential for scaling up AI without the constraints of traditional data centres.
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