SpaceX just bought AI startup xAI, and the deal rewrites the M&A scorecard. The transaction pegs SpaceX at roughly $1 trillion and xAI at about $250 billion, and it’s clearly about more than bragging rights. Musk says the move helps solve a coming problem - Earth might not have enough power and cooling for future AI workloads.
AI goes orbital: Musk wants AI off the ground, powered by near-constant solar energy. He calls space-based data centers the long-term scaling play, short sentence, big ambition.
Is it time to freak out? Not yet, but don’t relax either. Consolidating rockets, satellites, and AI stacks under one roof gives Musk unprecedented control over compute, bandwidth, and launch cadence, which matters when models need both raw flops and fast links. That sounds powerful, and scary depending on your view of concentrated tech empires.
Regulatory and technical roadblocks are real. The deal will draw national-security reviews - SpaceX holds big federal contracts - and orbiting datacenters bring latency, maintenance, radiation, and cost headaches. Also, governance questions pop up when one person sits at multiple company controls, short sentence, obvious friction.
So what now? Expect a lot of runway-level engineering and regulatory theater. If it works, AI compute could move off-planet and change the economics of truly massive models. If it’s overhyped, it’ll be a bold experiment that costs a lot. Either way, Musk just doubled down on owning the full stack, literal and figurative.
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