Elon Musk’s SpaceX will officially acquire Elon Musk’s xAI, with plans to build a data center in space

SpaceX has acquired Elon Musk’s artificial intelligence startup, xAI, creating the world’s most important commercial space company, the aerospace company announced on Monday.

Musk, who is also the CEO of SpaceX, wrote in a memo it was posted on the website of the rocket company that the main integration involves the creation of a data center – an idea that he settled on in the last few months.

“Today’s advances in AI depend on the world’s largest data centers, which require a lot of power and cooling.” The world’s electricity demand for AI cannot be solved by global means, even in the near future, without causing problems for people and the environment,” he wrote. (xAI was criticized bring some of those problems in areas near its data center in Memphis, Tennessee.)

The deal makes the combined company worth $1.25 trillion, according to Bloomberg News, which was the first say everythinged deal. SpaceX has been there he says preparing for an IPO in early June this year. It is not known whether the merger will affect the period. Musk did not address the IPO in his public filings.

The merger creates two companies for Musk, each with its own financial challenges. xAI is burning about $1 billion per monthaccording to Bloomberg. SpaceX, meanwhile, makes 80% of its revenue by launching its Starlink satellites, according to Reuters. Last year, xAI found Xa social media company also owned by Musk, which Musk says the company generates $113 billion in revenue.

Musk wrote in his notes that it will take a large number of people – although he did not specify how many – satellites to create these data centers, ensuring that SpaceX will always have more money in the future. (That amount of money seems pretty impressive when you consider that satellites have to be replaced every five years by the Federal Communications Commission.)

While a data center may be the stated goal, SpaceX and xAI have very different long-term goals.

SpaceX is currently trying to prove that its Starship rocket can deliver astronauts to the moon and Mars, while xAI is competing with leading artificial intelligence companies such as Google and OpenAI. The stress on xAI is high, a The Washington Post reported Mondaythat Musk loosened restrictions on the company’s chatbot Grok – which made it a tool for creating sexually explicit AI images of adults and children.

Musk is also the head Tesla, The Boring Company, and Neuralink. Tesla and SpaceX they have already been installed $2 billion each in xAI.