SpaceX Has Acquired XAI and make a $1.25 Trillion Company – IPO Will Still Happen

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SpaceX has acquired XAI. the combined ocmpany will have a valuation of $1.25 trillion.

The SpaceX acquisition of xAI was announced and closed on February 2, 2026. Multiple reports, including from Bloomberg, Reuters, TechCrunch, and direct statements on SpaceX’s website confirm the deal as completed on that date. The deal happened today. Not a merger an acquisition

Value seems to all accrue to SpaceX.

xAI shareholders get to IPO in mid 2026 along with SpaceX.

SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform. This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!

Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.

In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!

The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space

By directly harnessing near-constant solar power with little operating or maintenance costs, these satellites will transform our ability to scale compute. It’s always sunny in space! Launching a constellation of a million satellites that operate as orbital data centers is a first step towards becoming a Kardashev II-level civilization, one that can harness the Sun’s full power, while supporting AI-driven applications for billions of people today and ensuring humanity’s multi-planetary future.

Orbital Data Centers

The basic math is that launching a million tons per year of satellites generating 100 kW of compute power per ton would add 100 gigawatts of AI compute capacity annually, with no ongoing operational or maintenance needs. Ultimately, there is a path to launching 1 TW/year from Earth.

My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space. This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.

This new constellation will build upon the well-established space sustainability design and operational strategies, including end-of-life disposal, that have proven successful for SpaceX’s existing broadband satellite systems.

While launching AI satellites from Earth is the immediate focus, Starship’s capabilities will also enable operations on other worlds. Thanks to advancements like in-space propellant transfer, Starship will be capable of landing massive amounts of cargo on the Moon. Once there, it will be possible to establish a permanent presence for scientific and manufacturing pursuits. Factories on the Moon can take advantage of lunar resources to manufacture satellites and deploy them further into space. By using an electromagnetic mass driver and lunar manufacturing, it is possible to put 500 to 1000 TW/year of AI satellites into deep space, meaningfully ascend the Kardashev scale and harness a non-trivial percentage of the Sun’s power.

4 thoughts on “SpaceX Has Acquired XAI and make a $1.25 Trillion Company – IPO Will Still Happen”

  1. Maybe the real goal isn’t energy efficiency, but instead getting the servers outside of the jurisdiction and monitoring of Earth based governments. Musk seems to be moving the entire internet except for the end users off the planet, which might be about circumventing local controls.

    Sure, eventually you want this stuff off planet for thermal reasons; You can only dump so much heat into Earth’s biosphere. But I wouldn’t have thought we were close to that limit yet.

    Unless Musk really thinks he’s going to crack self-replication in the near future, in which case getting a jump on designing and proving out space based hardware might be a smart move. A lot of what he’s doing lately points in that direction, that he thinks self-replication is attainable in the near term.

    • His biggest concern against Earth is the regulatory hurdle for building anything massive, especially power plants for data centres. Source: Dwarkesh interview

  2. Wish they would both Merge with Tesla, then us shareholders could enjoy in the huge growth of those businesses in the coming years. After all, You can have the biggest brained AI, but without it being in cars & bots…it’s very limited in what it can do.

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