Elon Musk is combining his space exploration and artificial intelligence businesses into one company ahead of a massive IPO planned for…
NEW YORK (AP) — Elon Musk is combining his space exploration and artificial intelligence businesses into a single company ahead of what is expected to be a massive IPO for the company later this year.
His rocket company, SpaceX, announced Monday that it had purchased xAI in a bid to help the world’s richest man dominate the rocket and artificial intelligence industry. The deal will combine several of its offerings, including its AI chatbot Grokher satellite communications company Starlinkand his social media company X.
Musk has repeatedly spoken about the need to accelerate the development of technologies that will allow data centers to operate in space. He believes this will help overcome the problem of huge costs for electricity and other resources needed to build and operate AI systems on Earth.
It’s a goal Musk suggested in his announcement that the deal could become easier to achieve with a combined company.
“In the long term, space AI is obviously the only way to scale,” Musk wrote Monday on SpaceX’s website, then added, in reference to solar power, “It’s always sunny in space!”
Musk said in his announcement that he believes “that within 2 to 3 years, the cheapest way to generate AI calculations will be in space.”
SpaceX will compete in this area with Google, which is working on a research project called Project Suncatcher that would equip solar-powered satellites with AI computer chips, with a prototype that could launch as early as next year.
But Musk’s prediction for a near future of AI space supercomputers is not shared by many other companies building data centers, including Microsoft.
“I will be surprised if people move from Earth to low Earth orbit,” said Brad Smith, president of Microsoft. told the Associated Press last monthasked about alternatives to building data centers in the United States amid growing community opposition.
Musk already faces stiff competition in the artificial intelligence space, where he is struggling to compete with rivals such as OpenAI, which is also working on an IPO. Musk’s dislike of OpenAI, which he helped found more than a decade ago, is part of what pushed him to launch xAI in 2023 and create the ChatGPT alternative he named Grok.
Musk has equally ambitious projects for Tesla as he attempts to pivot a company with declining car sales to focus more on self-driving taxis and humanoid robots, driven by artificial intelligence.
Tesla recently announced a $2 billion investment in xAI.
Musk has already used his control over several companies to combine his operations. Tesla bought SolarCity ten years ago. And it recently tapped xAI to buy its social media platform X, formerly called Twitter.
Talk on Wall Street that the billionaire is continuing to merge his many businesses into one gigantic Musk Inc. has gained momentum in recent months, with some investors speculating that Tesla could also partner with SpaceX.
Forbes magazine estimates Elon Musk’s net worth at $768 billion. He also owns a brain implant company called Neuralink and a tunneling company named Boring Company.
Terms of SpaceX’s purchase of xAI were not disclosed. Among the outside investors in the companies is a fund in which President Donald Trump’s son, Don Jr., is a partner. That company, 1789 Capital, has made more than $1 billion in investments in various Musk companies over the past year, including SpaceX, xAI and X, according to data provider Pitchbook, although it has already cashed out some of that.
While continuing its research into space data centers, xAI is also moving quickly to expand on Earth. Mississippi officials announced last month that the company would spend $20 billion to build a data center near the state’s border with Tennessee.
The data center, called MACROHARDRR, a likely pun on Microsoft’s name, will be the third in the greater Memphis area.
Musk also hopes the combined company can eventually help achieve another goal he’s long talked about: the need to colonize other planets in the event of a natural or man-made disaster on Earth.
During a speech at the World Economic Forum in Davos last week, Musk referred to humanity as “a small candle in a vast darkness, a small candle of consciousness that could easily go out.”
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