Technology & Science
SpaceX Absorbs xAI in $1.25 Trillion Bid for Orbital AI Super-Compute
On 3 Feb 2026 Elon Musk folded his AI startup xAI into SpaceX, setting up a single private firm worth roughly $1.25 trillion and tasking it with deploying solar-powered data-centre constellations in orbit ahead of an anticipated IPO this year.
Focusing Facts
- Internal memo pegs SpaceX at ~$1 trillion and xAI at ~$250 billion; combined share price communicated to employees: $526.59.
- FCC filing 30 Jan 2026 seeks permission for up to 1 million satellites to host space-based AI data centres.
- Musk claims orbital compute will undercut terrestrial costs within 2–3 years.
Context
This merger echoes J. P. Morgan’s 1901 creation of U.S. Steel—another moment when a charismatic industrialist fused complementary assets to dominate an emergent, capital-hungry sector. Like Boeing’s 1960s vertical integration around the Saturn V, Musk is knitting rockets, communications, data and content into one stack, but now the payload is cognition itself. The deal amplifies two long arcs: (1) the steady privatization of infrastructure once led by states—launch, broadband, now perhaps super-computing; (2) tech’s return to Gilded-Age style conglomerates where cross-ownership blurs competitive lines and regulatory firewalls. Whether orbital data farms prove cheaper than ground facilities hinges on launch costs, radiation-hardened chips and Kessler-syndrome risks, but the attempt signals a pivot from planet-bound resource limits toward extraterrestrial industrialization. If successful, it nudges humanity toward a Kardashev-I+ civilisation this century; if it fails, it may join Spruce Goose-style footnotes about visionary overreach. Either way, the consolidation concentrates unprecedented economic, informational and now orbital power in one private hand—an historical fact future regulators and historians will weigh for decades.
Perspectives
Business and financial press
e.g., Bloomberg Business, Economic Times, ArcaMax — Present the tie-up as a savvy pre-IPO consolidation that turbo-charges SpaceX’s valuation and creates a $1.25 trillion behemoth poised to unlock new revenue streams from AI and satellites. Coverage targeted at investors tends to amplify eye-catching valuations and growth narratives while skimming over antitrust scrutiny, environmental impacts and the risk of Musk’s cross-company conflicts of interest.
Tech and mainstream outlets spotlighting technical hurdles and controversies
e.g., Decrypt, CNN/Channel 3000 — Cast the merger as Musk’s bid to escape Earth-bound energy limits but stress unresolved challenges—Starship reliability, million-satellite latency, Grok’s antisemitic ‘meltdowns,’ and culture clashes inside the firms. By foregrounding glitches and scandals they cater to an audience wary of Big Tech hyperbole, which can tilt coverage toward worst-case scenarios and underplay the potential strategic upside for SpaceX.
Pro-Musk, futurist-leaning media
e.g., Washington Examiner, Republic World — Celebrate the deal as an audacious leap to ‘extend the light of consciousness to the stars,’ portraying space-based data centers as the inevitable next chapter of human progress. Admiration for Musk’s vision and free-speech branding encourages uncritical repetition of his claims while sidestepping past controversies, regulatory headwinds or technical feasibility.