SpaceX absorbs xAI as Musk bets on solar-powered, space-based AI data centres

SpaceX has acquired Elon Musk’s AI startup xAI, a consolidation aimed at building solar-powered, space-based data centres to meet the fast-rising energy demands of artificial intelligence. Musk argued that the power and cooling needs of future AI systems make orbital infrastructure the lowest-cost option within two to three years, and tied the plan to SpaceX’s push for rapid Starship flight cadence and a larger Starlink constellation, including higher-capacity V3 satellites. The combined company brings together Musk’s space, AI, satellite internet and social media assets, and underscores SpaceX’s deepening government ties through NASA and Defense Department work via Starshield. Musk’s gambit comes as rivals including Blue Origin and Google’s Project Suncatcher explore similar solar-powered concepts in space.

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