Elon Musk’s rocket and satellite company SpaceX are acquiring his artificial intelligence startup xAI, the 100th billionaire announced on Monday. In blog entryMusk said the acquisition was justified because global electricity demand for AI cannot be met by “ground-based solutions” and Silicon Valley will soon need to build data centers in space to meet its AI ambitions.
“In the long term, space-based AI is obviously the only way to scale,” Musk wrote. “The only logical solution, then, is to move resource-intensive efforts to locations with enormous power and space. I mean, space is called ‘space’ for a reason.”
The deal, which combines two of Musk’s largest private ventures, values the combined entity at $1.25 trillion, making it the world’s most valuable private company, according to report from Bloomberg.
SpaceX was preparing to go public later this year before the xAI acquisition was announced. According to Bloomberg, the space company’s plans for an initial public offering are still on the table.
In December, SpaceX told employees it would buy insider shares in a deal that would value the rocket company 800 billion dollars– reports “The New York Times”. Last month, xAI announced that it had raised $20 billion from investors, raising the company’s valuation to approximately $230 billion.
This isn’t the first time Musk has sought to consolidate parts of his expansive business empire, which is largely privately held and includes xAI, SpaceX, brain interface company Neuralink and tunnel transportation company Lifeless Company.
Last year, xAI acquired Musk’s social media platform, X, formerly known as Twitter, in a deal that valued the combined entity at more than $110 billion. Since then, xAI’s core product, Grok, has been further integrated into the social media platform. Grok features prominently in various X features, and Musk says the app’s content recommendation algorithm is powered by xAI technology.
A decade ago, Musk also used shares of his electric car company Tesla to buy SolarCity, a renewable energy company then run by Lyndon Rive’s cousin.
The xAI acquisition shows how Musk can leverage his sweeping network of companies to support realize his own, often grandiose, visions for the future. Elon Musk said in a blog post that SpaceX will immediately focus on launching satellites into space to support artificial intelligence development on Earth, but eventually the space data centers he envisions building could power civilizations on other planets, such as Mars.
“This marks not just the next chapter, but the next book in the SpaceX and xAI mission: scaling up to create a sentient sun that understands the Universe and extends the light of consciousness to the stars,” Musk said in a blog post.