Elon Musk has announced a major consolidation of his business empire, merging Texas-based SpaceX with his artificial intelligence startup xAI, a move aimed at accelerating plans to build space-based data centers powered by artificial intelligence.
According to Reuters, the combined company is valued at $1.25 trillion, making it one of the largest corporate mergers ever. Musk revealed the deal on Feb. 2, framing it as a long-term strategy to scale AI computing beyond Earth.
Why the merger matters
- The merger aligns SpaceX’s launch and satellite capabilities with xAI’s artificial intelligence development, including the Grok chatbot.
- Musk envisions orbital data centers, potentially involving up to 1 million satellites, as a more energy-efficient and environmentally friendly alternative to terrestrial data centers.
- Musk argues that space-based AI infrastructure benefits from constant solar energy and avoids the land, water, and power constraints faced on Earth.
Texas plays a central role.
- SpaceX’s massive Starship rocket, which launches from Starbase in South Texas, is key to the plan.
- Starship, the world’s largest rocket, is being designed to carry 200 tons per launch, enabling the deployment of heavy satellite infrastructure needed for orbital data centers.
- A more powerful version of Starship is expected to debut in 2026, the same year Musk is reportedly considering a SpaceX IPO.
About the companies
- SpaceX, founded in 2002, operates Falcon 9 rockets, the Starlink satellite network, and holds major NASA and Department of Defense contracts.
- xAI, founded in 2023, develops AI systems and was originally integrated with Musk’s social platform X (formerly Twitter).
Big picture
The merger signals Musk’s belief that the future of AI scaling lies in space, with Texas serving as the launchpad for a potentially transformative shift in global computing infrastructure.
Source:
https://www.caller.com/story/news/local/2026/02/04/spacex-starbase-xai-musk/88490272007/
Reporter: Eric Lagatta | USA TODAY Network