Musk: I have merged xAI with SpaceX
Elon Musk today announced that he has merged the company xAI (which includes X) with SpaceX, because in his mind the needs of the two companies interlace perfectly.
The requirement to launch thousands of satellites to orbit became a forcing function for the Falcon program, driving recursive improvements to reach the unprecedented flight rates necessary to make space-based internet a reality. This year, Starship will begin delivering the much more powerful V3 Starlink satellites to orbit, with each launch adding more than 20 times the capacity to the constellation as the current Falcon launches of the V2 Starlink satellites. Starship will also launch the next generation of direct-to-mobile satellites, which will deliver full cellular coverage everywhere on Earth.
While the need to launch these satellites will act as a similar forcing function to drive Starship improvements and launch rates, the sheer number of satellites that will be needed for space-based data centers will push Starship to even greater heights. With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year, enabling an exciting future where humanity is out exploring amongst the stars.
The basic math is that launching a million tons per year of satellites generating 100 kW of compute power per ton would add 100 gigawatts of AI compute capacity annually, with no ongoing operational or maintenance needs. Ultimately, there is a path to launching 1 TW/year from Earth.
My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space. This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.
Many sources online are speculating that this new merged company will make the company’s initial public offering (IPO) now rumored for this summer even more sky high. I remain puzzled however why Musk would want to do it, and this merger today illustrates why. He controls both SpaceX and xAI completely, as both are privately owned. He didn’t need to convince government regulators of anything. Once the company is public, with publicly traded stock, that will change. He will no longer have such freedom of action.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Elon Musk today announced that he has merged the company xAI (which includes X) with SpaceX, because in his mind the needs of the two companies interlace perfectly.
The requirement to launch thousands of satellites to orbit became a forcing function for the Falcon program, driving recursive improvements to reach the unprecedented flight rates necessary to make space-based internet a reality. This year, Starship will begin delivering the much more powerful V3 Starlink satellites to orbit, with each launch adding more than 20 times the capacity to the constellation as the current Falcon launches of the V2 Starlink satellites. Starship will also launch the next generation of direct-to-mobile satellites, which will deliver full cellular coverage everywhere on Earth.
While the need to launch these satellites will act as a similar forcing function to drive Starship improvements and launch rates, the sheer number of satellites that will be needed for space-based data centers will push Starship to even greater heights. With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year, enabling an exciting future where humanity is out exploring amongst the stars.
The basic math is that launching a million tons per year of satellites generating 100 kW of compute power per ton would add 100 gigawatts of AI compute capacity annually, with no ongoing operational or maintenance needs. Ultimately, there is a path to launching 1 TW/year from Earth.
My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space. This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.
Many sources online are speculating that this new merged company will make the company’s initial public offering (IPO) now rumored for this summer even more sky high. I remain puzzled however why Musk would want to do it, and this merger today illustrates why. He controls both SpaceX and xAI completely, as both are privately owned. He didn’t need to convince government regulators of anything. Once the company is public, with publicly traded stock, that will change. He will no longer have such freedom of action.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
X AI / SPACEX IPO @ $1500 per share? More? Less?
If you are serious about actually sending people to Mars to establish a colony (and they are crazy enough to go) you will be needing a massive amount of cash, and he will have it if he so chooses.
And by thus doing so Elon will essentially own his own planet.
And that may actually be what is driving him in this area?
Who else could say that they essentially own and control their own planet ever in history?
Why does this feel like a headlong rush into the ‘Terminator’ universe?
Hmmm. Controls a planet, the interplanetary shipping business, an orbital constellation of AI nodes, and autonomous machinery. In the near future, our boy Jimmy B and MI6 are going to have their work cut out.
Elon/Yutani? (I kid)
No…I think this is the beginning of the end of his Mars aspirations.
I am gloomy for a reason…the political pendulum doesn’t just strike politicians when it comes around–but anyone associated with them.
In terms of the Terminator universe, there already is a Skynet…UK sats or something.
Commonly it is said that he wants to go into orbital data centers and or the mass production of Optimus robots. That would require truly massive amounts of capital, but only successes in the above could realistically fund his full Mars ambitions. Not sure how accurate all that is, but that’s what I’ve heard said.
Please delete previous post and this one. It wasmeant for another place. My apologies
Cloudy: I see no reason to delete your comment. It is pertinent and reasonable. I am also puzzled why you would want it deleted.
I believe that spacex IPO will be the most valuable in marker history and spacex will colonize Mars. I would like to receive a few acres of Mars as a stock dividend someday
“Who else could say that they essentially own and control their own planet ever in history?”
The closest historical analogy is the British East India Company, which found a way to take control of the entire Indian subcontinent!
Obviously, a company gaining a whole planet would be a big step up. But China will likely get a say in all this, too. And it is worth remembering what actors finally brought down the East India Company — a deeply embarrassing local revolt, and the resulting response of its own national government.
Eric Berger’s article on the merger announcement had an interesting data point about Falcon 9’s internal launch cost:
“SpaceX already has the world’s workhorse reusable rocket with the Falcon 9. It can presently deliver about 20 tons to low-Earth orbit for an internal cost of $15 million, compared to more than four or five times that on the open market. Moreover, SpaceX is working toward fully reusable super heavy lift rocket with its Starship vehicle.”
There’s been a lot of public speculation the last few years that this cost was now down as low as the $10-20 million range, so it’s nice to see this confirmed by Eric, who obviously has some good internal sources at SpaceX.
$15 million for a medium-lift orbital launch! That should really amaze us all. The future for access to space is getting brighter by the day.
Kistler might have gotten those even lower…no need for precision landing…airbags and parachutes only.
I am surprised no one has emulated them.
I, too, wish Kistler had found a way to survive and prosper. But I also don’t think there’s even an optimal scenario where they operate as the kind of technological and economic forcing function that SpaceX has become. So much of that comes down to the fact that SpaceX had Elon Musk, and Kistler had a quite elderly George Mueller and George French.
(It’s also true that retropropulsive landing allows for a considerably faster recovery and refurb time than fishing a booster out of the water; but I also tend to think that, eventually, Kistler would have figured that out and evolved the architecture — albeit not as quickly or effectively as SpaceX did.)
Jeff Wright: people like imitating success. Few have the stomach to jump into the unknown or difficult with uncertain rewards, so it makes sense that nobody is going to imitate Kistler. It *may* be cheaper, but there are no guarantees, especially because lowering costs isn’t only a function of the hardware, but also who is building it, how, and even why.
Yeah. When you’re trying to build a business case, you don’t want to spend any more time, or suffer any more risk, on a hardware development program than you have to. You are in business to make a profit, not to do applied research. If someone hits on an effective technical solution, the competition is usually going to pursue it, too.
In this context, I think back to the history of the early days of steam propulsion in the mid-19th century. In the early 1840’s, it was still unclear whether screw steam propulsion was a better technical solution than paddle-wheel/sidewheel propulsion. Most steam ships up to that point had used side wheels. The Royal Navy had played with them, too, but there was frustration with how the wheels blocked a lot of a warship’s broadside. So in 1844 they decided to stage a competition: they took two identical sloop hulls, put a sidewheel plant on one (HMS Alecto) and a screw steam plant on the other (HMS Rattler), and held sea trials to see how they performed head to head. Decisively, Rattler’s screw propulsion came out ahead. And after that, the Royal Navy started pursuing screw steam for its warships going forward.
In this case, it wasn’t even that side wheels did not *work*. They did! And in fact, they continued getting used on ships, and even worships right through to the 20th century, and you can still find them in use in riverine traffic in many places. In fact, during World War II, the Royal Navy even commissioned 30 sidewheel ships for minesweeping service because a) the plants were easier to manufacture at a time when speed to commission was of the essence, and b) it had figured out that their wooden hulls did not activate the new magnetic mines. But from the 1840’s the main track of ship propulsion in *all* navies (and commercial steamers) went to screws, because this really was the optimum solution for just about any context in maritime activity.
I think, if Rocketplane Kistler had survived, they’d have ultimately gone over to retropropulsive landing, too. And not because airbags and parachutes couldn’t be made to work.
The article referenced by Richard M:
https://arstechnica.com/ai/2026/02/spacex-acquires-xai-plans-1-million-satellite-constellation-to-power-it/
My suspicion is that this cost is a per unit cost only, for propellants, manufacturing a second stage, and launch operations. It probably does not include amortizing facilities, development, and other costs that are now relatively minor per launch.
Which means that each Falcon 9 launch for customers brings in around $50 million (a little less). Last year they had more than 60 launches for paying customers, for profits of around $3 billion or so. Nice work, if you can get it.
So, that is $3 billion that is available to develop Starship, to build and launch Starlink satellites, to develop the AI orbital constellation, or a combination of the three SpaceX projects. Add the Starlink profits to this, and we have to wonder whether SpaceX needs to sell stock or whether it already makes enough profit to support the future plans for AI and lunar settlement, mining, and manufacturing. If they raised a lot of money through an initial public offering, would they be able to spend that money fast enough to be worth the loss of freedom, or are they already making profit as fast as they can spend it on their expansions?
Why AI for SpaceX? To reduce the need for humans on the Moon for its lunar operations, and later to increase the productivity of the humans on Mars. Fewer people generating more productivity allows for more profits from these two additional future projects. More productivity makes multi-planetary expansion more desirable.
We keep hearing people wonder how a Mars colony would be able to pay for itself, and the added productivity from AI operations is the answer.
As Richard M wrote, “If someone hits on an effective technical solution, the competition is usually going to pursue it, too.” SpaceX will not be the only company settling the Moon and Mars. Blue Origin already understands the advantages of reusable launch vehicles, and other companies are developing reusability, too.
To Edward,
I think everything you say would be true if the current situation (a friendlier administration) went on indefinitely…but that may not always be the case.
If AI winds up being heavily regulated down the road, it then will hobble SpaceX’s dreams rather than advance them….all this depends of elections of course.
Now, what business acquisition might help Elon if the DNC returns to power?
This is a more proper earth-based analogy for a Mars colony and the basic logistics involved and of course with 1G of gravity, an atmosphere to freely breath, it is much warmer and the radiation is tolerable and will not tend to turn you into a bone brittle hydrocephalic DNA mutant:
Drilling into the last ice age: https://youtu.be/m4qsl00HIkQ?si=GCP1iDe8VkHT-itx
Transporting 47 tons of fuel and 67 tons of miscellaneous cargo.
After spending 9 months in zero gravity traveling 30,000,000 miles.
The last 13 thousand years of earth’s history are very interesting.