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Elon Musk has merged SpaceX with his AI startup xAI, creating what Bloomberg calls the world’s most valuable private company, valued at around $1.25 trillion.
The deal brings two very different Musk companies under one roof, space rockets and artificial intelligence.
In simple terms, Musk is tying his space business directly to his AI ambitions.
Musk says the future of AI needs far more power and computing than Earth can realistically provide. His solution is space-based data centres, powered by satellites instead of land-based facilities.
In his words:
“Global electricity demand for AI simply cannot be met with terrestrial solutions… without imposing hardship on communities and the environment.”
The why: xAI is burning nearly $1 billion a month, while SpaceX earns up to 80% of its revenue from Starlink launches. Combining the two creates a built-in loop. AI needs satellites, satellites need launches, and SpaceX provides both.
If Musk’s plan works, SpaceX could launch a constant stream of satellites to support AI computing in orbit, locking in long-term revenue. It also gives xAI access to massive infrastructure at a time when it’s under pressure from Google, OpenAI, and others.
