SpaceX has acquired artificial intelligence company xAI in a strategic move aimed at bringing AI development, rocket launches, satellite internet and direct-to-mobile communications under one corporate roof. The deal signals SpaceX’s ambition to tightly integrate advanced AI systems with its expanding space and satellite operations.

With the acquisition, xAI’s research capabilities and AI products will become part of SpaceX’s broader ecosystem, which includes Starlink’s satellite internet network and the Starship launch programme. The transaction values SpaceX at around $1 trillion, while xAI is valued at approximately $250 billion.

Under the terms of the deal, xAI shareholders will receive 0.1433 shares of SpaceX for every xAI share they own. Some executives at xAI may opt for a cash payout instead, priced at $75.46 per share.

SpaceX Bets on Orbital Data Centres to Overcome Earth’s AI Compute Limits

Explaining the rationale behind the merger, SpaceX said the combined company will focus on scaling AI computing far beyond the limits of Earth. The firm argued that traditional data centres are increasingly constrained by power availability, cooling demands and environmental concerns.

According to the company, meeting global electricity needs for AI workloads using only terrestrial infrastructure is becoming unrealistic. As an alternative, SpaceX believes orbit-based AI systems powered by near-continuous solar energy offer a more sustainable and scalable solution.

The company outlined plans to deploy massive constellations of satellites that would function as space-based data centres, effectively moving large-scale AI computing into orbit. SpaceX said its fully reusable Starship rocket would play a central role in this vision, with future launches potentially occurring every hour and carrying up to 200 tonnes per flight.

SpaceX estimates that Starship could eventually deliver millions of tonnes of payload to orbit annually, a dramatic increase from today’s launch capacity. The company said that despite 2025 being its most active year for launches, only about 3,000 tonnes of payload reached orbit, largely through Falcon missions carrying Starlink satellites.

Looking ahead, Starship is expected to enable the deployment of higher-capacity V3 Starlink satellites and next-generation direct-to-mobile systems that could provide global cellular coverage.

SpaceX estimates that launching one million tonnes of satellites per year, with each tonne generating roughly 100 kilowatts of compute power, could add about 100 gigawatts of AI computing capacity annually. The company said there is a clear path to deploying one terawatt of AI compute per year, claiming that within two to three years, space could become the most cost-effective location for large-scale AI computing.

The company added that the proposed AI satellite constellation would follow existing space sustainability practices, including controlled end-of-life disposal methods used in its current broadband satellite systems.

Beyond Earth orbit, SpaceX outlined longer-term ambitions involving the Moon and deep space. It said Starship’s in-space refuelling and heavy-lift capabilities could support large cargo landings on the lunar surface, eventually enabling manufacturing facilities that use lunar resources.

According to SpaceX, lunar manufacturing combined with electromagnetic mass drivers could allow satellites to be produced using local materials and deployed deeper into space. The company said these capabilities would support scientific research, space-based manufacturing and the establishment of permanent human settlements beyond Earth.

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