- SpaceX acquires xAI to form a new mega-company
- Elon Musk is promising to move AI computing power into space
- Experts are split on whether the ambitious plans can work
Elon Musk has formed the most valuable private company in the world, reportedly valued at a hefty $1.25 trillion, by merging rocket-making outfit SpaceX and artificial intelligence developer xAI into one mega-business ready to take AI computing into orbit.
SpaceX has now acquired xAI, to create “the most ambitious, vertically-integrated innovation engine on (and off) Earth” – that’s according to the official press release penned by Elon Musk himself, CEO of both companies.
This follows on from news over the weekend that SpaceX plans to launch up to a million satellites into space in the coming years, ready to shift AI computing infrastructure from the ground into orbit.
With an unlimited amount of room in space and power provided by solar energy – at least in theory – the thinking is that our ever-growing needs for AI capabilities could be met by shifting the back-end of the operation out of Earth’s atmosphere.
To the stars
“In the long term, space-based AI is obviously the only way to scale,” says Musk. “To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!”
The solution is apparently to make a “sentient sun” out in space with satellite constellations, according to Musk. These efforts will draw on all of the expertise at SpaceX, and technologies currently used for Starlink satellites and Falcon rockets.
Upcoming Starship rocket launches are scheduled to put more and more computing power in orbit, and the aim is to get a terawatt of AI compute capacity launched every year. In the long term, installations on the Moon are also planned.
“The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe,” concludes Musk.
Do the numbers add up?
As per Reuters, the deal could yet attract scrutiny from regulators, ahead of a planned IPO (Initial Public Offering) for SpaceX. However, analysts believe that the deal makes sense – combining revenues from both space operations and AI.
Emma Wall, chief investment strategist at Hargreaves Lansdown, told the BBC that the merger combined “two incredibly frontier technologies”, but cautioned that any benefits wouldn’t be seen by users on planet Earth for at least a decade.
Elon Musk isn’t alone in thinking that the future of AI data centers lies in space: Google, Amazon, and Nvidia are among the big tech companies that have backed the idea, with Google planning an initial launch sometime in 2027.
Not everyone is convinced the numbers add up though. Space economist Pierre Lionnet at Eurospace told the New York Times that the idea that space operating costs would drop enough to make this work was “completely nonsensical”.
Phil Metzger, a University of Central Florida physics professor, is more optimistic that the economics will make sense in the short term. “As a business case, it’s plausible,” he told the NYT. “It’s been an evolving discussion.”
In other words, while this ambitious plan has a long way to run, orbital AI data centers are preparing for lift-off – and a new space race is brewing.
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