New York — Elon Musk is joining his space exploration and artificial intelligence ventures into one company ahead of what is expected to be a massive initial public offering for the company later this year.
His rocket venture, SpaceX, announced Monday that it has bought xAI in a bid to help the world’s richest man take control of the rocket and artificial intelligence business. The deal will combine many of his offers, Including its own AI-powered chatbot, Grokfor him Starlink satellite communications companyAnd his social media company X.
Musk has repeatedly spoken about the need to accelerate the development of technology that will allow data centers to operate in space. He believes this will help overcome the problem of the high costs of electricity and other resources in building and operating artificial intelligence systems on Earth.
It’s a goal that Musk suggested in announcing the deal, and one that may become easier to achieve with a combined company.
“In the long term, space-based AI is clearly the only way to scale,” Musk wrote on SpaceX’s website on Monday, then added in a reference to solar energy, “It’s always sunny in space!”
Musk said in his announcement that he estimates that “within two to three years, it will be the most cost-effective way to create AI computing in space.”
SpaceX will compete in this space with Google, which is working on a research project called Project Suncatcher that would equip solar-powered satellites with artificial intelligence computer chips, with a prototype that could launch as soon as next year.
But Musk’s predictions about the near future of AI-based supercomputers in space are not shared by many other companies building data centers, including Microsoft.
“I would be surprised if people moved from Earth to low Earth orbit,” Microsoft President Brad Smith said. He told The Associated Press last monthWhen asked about alternatives to building data centers in the United States amid growing societal opposition.
Musk already faces stiff competition in the AI space, as he has been scrambling to compete against rivals like OpenAI, which is also working on an IPO. Musk’s dislike of OpenAI, which he helped found more than a decade ago, is part of what prompted him to start xAI in 2023 and build a ChatGPT alternative that he calls Grok.
Musk has it Equally ambitious plans for Tesla While the company, which is suffering from shrinking car sales, is trying to focus more on self-driving taxis and humanoid robots, driven by artificial intelligence.
Tesla recently announced a $2 billion investment in XAI.
Musk has used his control of several companies to merge operations before. Tesla bought SolarCity a decade ago. He recently purchased xAI for his social media platform X, formerly called Twitter.
Talk on Wall Street about the billionaire continuing to merge his numerous ventures together into his massive Musk Inc. has been raging in recent months, with some investors speculating that Tesla will join forces with SpaceX as well.
Forbes magazine estimates Musk’s net worth at $768 billion. He also owns a brain implant company called Neuralink and a tunneling company called The Boring Company.
Terms of SpaceX’s purchase of xAI were not disclosed. Outside investors in the companies include a fund in which Don Jr., President Donald Trump’s son, is a participant. That company, 1789 Capital, made more than $1 billion in investments in several of Musk’s companies last year, including SpaceX, xAI and X, according to data provider Pitchbook, though it has already withdrawn money from some of them.
While pursuing space-based data centers, XAI is also moving quickly to expand on Earth. Mississippi officials announced last month that the company is set to spend $20 billion to build a data center near the state’s border with Tennessee.
The data center, called MACROHARDRR, a possible pun on Microsoft’s name, will be the third in the greater Memphis area.
Musk also hopes that the combined company will eventually help reach another goal he has long talked about, which is the need to colonize other planets in the event of a natural or man-made disaster on Earth.
When Musk spoke at the World Economic Forum in Davos last week, he spoke of humanity being “a little candle in the darkness, a little candle of awareness that can easily be extinguished.”