SpaceX Confirms xAI Acquisition
SpaceX has officially acquired the artificial intelligence company xAI. CEO Elon Musk announced the decision through an internal memo. At the same time, he revealed a bold plan to build large AI data centers in space using solar energy.
Integration of AI, Space, and Connectivity
With this acquisition, SpaceX will combine its launch technology, satellite systems, and global communication network with xAI’s AI research. As a result, Musk sees this move as a major step toward a vertically integrated technology platform. In other words, AI, space transportation, and worldwide connectivity will now work together.
Challenges of Earth-Based AI Expansion
Currently, AI development depends heavily on large data centers on Earth. However, these facilities consume enormous amounts of electricity. Moreover, they require extensive cooling systems. Because of this, Musk warned that further expansion could harm the environment and pressure local communities.
Therefore, Musk stated, “In the long term, space-based AI is the only realistic way to scale.”
Satellites Designed as Orbital Data Centers
According to the memo, SpaceX plans to deploy a massive number of satellites. These satellites will operate as orbital data centers. Additionally, Musk suggested that launching up to one million satellites could mark an early step toward a Kardashev Type II civilization. Such a civilization can harness energy at a planetary level.
Limits of Current Launch Capacity
Historically, launch capacity has limited how much material can reach orbit. For example, even in 2025—the busiest launch year so far—only about 3,000 tons of payload reached space. Most of this payload consisted of Starlink satellites launched using Falcon rockets.
Starship to Enable Rapid Growth
Because of the need for large-scale deployment, SpaceX upgraded the Falcon program. Meanwhile, this demand also accelerated the development of the much larger Starship rocket. SpaceX expects Starship to begin launching upgraded Starlink satellites this year.
As a result, each Starship flight will carry far more capacity than Falcon missions. Additionally, these next-generation satellites will provide direct cellular connectivity to mobile phones worldwide.
High-Frequency Launch Plans
Looking ahead, Musk said Starship could eventually launch once every hour. Each flight could carry up to 200 tons of payload. Consequently, SpaceX could deliver millions of tons of material into orbit every year.
Massive AI Computing Potential
Musk explained that this scale could dramatically increase AI computing power. For instance, deploying one million tons of satellites annually could generate around 100 kilowatts of compute power per ton. Therefore, SpaceX could add nearly 100 gigawatts of AI capacity each year. Over time, this could grow to one terawatt annually.
Cost Benefits of Space-Based AI
Moreover, Musk believes space-based AI computing could become cheaper than Earth-based systems within two to three years. Because of lower costs, companies could train AI models faster. In addition, they could process data at unprecedented speed and scale.
Focus on Space Sustainability
Importantly, the planned satellite systems will follow SpaceX’s space sustainability standards. These include controlled end-of-life disposal procedures. As a result, SpaceX aims to reduce long-term orbital debris.
Expansion Beyond Earth Orbit
Beyond Earth orbit, Musk said Starship could support large-scale lunar operations. For example, it could enable cargo landings and manufacturing using Moon resources. Furthermore, satellites built on the Moon and launched into deep space could greatly expand AI computing capacity and energy usage.
Competition and Future Missions
Meanwhile, SpaceX continues testing Starship for future Moon and Mars missions. At the same time, xAI competes with major AI companies such as Google and OpenAI.