Privately held aerospace company SpaceX has acquired AI start-up xAI, ahead of a planned IPO for the rocket maker and announced plans to build data centres in orbit.
The acquisition means that social media platform X, formerly Twitter, will now also be part of SpaceX, after xAI’s acquisition of X last March.
SpaceX, xAI and X are all led by entrepreneur Elon Musk, who is also chief executive of electric automaker Tesla, the only one of his companies that is currently traded on public markets.
IPO plans
Following the merger, SpaceX is the world’s most valuable private company.
xAI is understood to lose about $1 billion (£730m) per month, due in part to its operation of the AI chatbot Grok, which utilises expensive cloud infrastructure.
SpaceX, on the other hand, holds lucrative US government contracts with NASA and the military, being the only US company currently able to carry out reliable launches into orbit.
The aerospace company also has growing revenues from its Starlink broadband satellite offering.
Musk said in a memo to staff, which was also posted online, that data centres in orbit would allow cost efficiencies and greater scalability of data processing.
Orbital data centres
xAI raised funds at a valuation of $230bn in January, while SpaceX in December was set to go ahead with a share sale at a valuation of about $800bn.
SpaceX invested $2bn in xAI last year, while Tesla said in January it would invest the same amount in the AI start-up.
