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SpaceX Acquires xAI, As Elon Musk Plans Space AI Data Centers
February 02, 2026
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SpaceX has officially acquired artificial intelligence startup xAI, merging two of Elon Musk’s most ambitious ventures into a single, vertically-integrated entity valued at $1.25 trillion (SpaceX at approximately $1 trillion and xAI at $230–250 billion).

The acquisition, confirmed Monday, was announced via a public statement from SpaceX, with Musk stating: “SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform.”

The merger follows SpaceX’s February 2026 filing with the Federal Communications Commission (FCC) seeking approval to launch a constellation of up to 1 million satellites designed to function as orbital data centers. These solar-powered satellites, operating between 500 km and 2,000 km altitude in Sun-Synchronous Orbit, are intended to provide unprecedented computing capacity for AI models.

Musk emphasized that “the lowest cost way to generate AI compute will be in space” within two to three years, citing the limitations of terrestrial data centers in terms of power, cooling, and environmental impact. He argued that space offers “vast power and space” — specifically, the ability to harness solar energy on a massive scale — as the only viable long-term solution for AI’s exponential growth.

xAI, founded in 2023, owns the social media platform X and developed the AI chatbot Grok.

SpaceX, valued at $800 billion pre-merger, is preparing for a $1.5 trillion IPO later in 2026, with the merger seen as a strategic move to bolster investor confidence by linking space infrastructure with AI demand.

The combined entity will leverage SpaceX’s Starlink satellite network, Starship rocket system, and xAI’s AI research, aiming to fund future projects like self-sustaining lunar bases and Martian colonies.

SpaceX and xAI have long shared personnel and operational overlap; the merger formalizes this integration. This positions the combined entity for massive scale in AI and space, and could accelerate Starship development and multiplanetary goals.

 

Full SpaceX statement by Elon Musk:

SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform. This marks not just the next chapter, but the next book in SpaceX and xAI's mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!

Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.

In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!

The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called “space” for a reason. 😂

By directly harnessing near-constant solar power with little operating or maintenance costs, these satellites will transform our ability to scale compute. It’s always sunny in space! Launching a constellation of a million satellites that operate as orbital data centers is a first step towards becoming a Kardashev II-level civilization, one that can harness the Sun’s full power, while supporting AI-driven applications for billions of people today and ensuring humanity’s multi-planetary future.

Orbital Data Centers

In the history of spaceflight, there has never been a vehicle capable of launching the megatons of mass that space-based data centers or permanent bases on the Moon and cities on Mars require. Even in 2025, the most prolific year in history in terms of the number of orbital launches, only about 3000 tons of payload was launched into orbit, primarily consisting of Starlink satellites carried by our Falcon rocket.

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.

This new constellation will build upon the well-established space sustainability design and operational strategies, including end-of-life disposal, that have proven successful for SpaceX’s existing broadband satellite systems.

While launching AI satellites from Earth is the immediate focus, Starship’s capabilities will also enable operations on other worlds. Thanks to advancements like in-space propellant transfer, Starship will be capable of landing massive amounts of cargo on the Moon. Once there, it will be possible to establish a permanent presence for scientific and manufacturing pursuits. Factories on the Moon can take advantage of lunar resources to manufacture satellites and deploy them further into space. By using an electromagnetic mass driver and lunar manufacturing, it is possible to put 500 to 1000 TW/year of AI satellites into deep space, meaningfully ascend the Kardashev scale and harness a non-trivial percentage of the Sun’s power.

The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe.

Thank you for everything you have done and will do for the light cone of consciousness.

Ad Astra!
Elon

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IRGC's 'Surprise Attack' Targets American Base In Jordan, As US, Saudi Arabia Strike Iraqi Sites Linked To Iran-backed Militia, PMF

The Islamic Revolutionary Guard Corps (IRGC) late Tuesday, launched multiple ballistic missiles and drones at U.S. military bases in Jordan, an operation U.S. Central Command (CENTCOM) described as an "attempted surprise attack" on U.S. forces in the Middle East.

At 2145 UTC (5:45 p.m. ET, July 28), IRGC forces fired multiple ballistic missiles from Khomein (a city in central Iran known for missile-related sites) toward U.S. targets, including around the Muwaffaq Salti Air Base near Azraq and a CENTCOM center in Jordan. This marked the first ballistic missile attack on a U.S. base in the region since President Trump ordered a pause on U.S. strikes against Iran on July 24, 2026, to allow for diplomatic negotiations regarding the Strait of Hormuz.

CENTCOM claimed in a statement that all Iranian missiles were successfully intercepted, with no reported damage or casualties to U.S. forces.

"At 5:45 p.m. ET today, Islamic Revolutionary Guard Corps forces launched multiple ballistic missiles from Iran in an attempted surprise attack on U.S. forces based in the Middle East. All Iranian missiles were successfully intercepted. U.S. forces remain vigilant and at a high state of readiness," CENTCOM wrote on X.

Iranian media outlet IRNA published a statement confirming the barrage aimed at the U.S. air base and Central Command node in Jordan, declaring: "As long as the threats against the Islamic Republic of Iran continue and the illegal and evil actions of the American forces against our interests continue, the resistance will continue."

Meanwhile CENTCOM also announced on X that U.S. and Saudi Arabian forces conducted precision strikes in eastern Iraq against sites linked to the Popular Mobilization Forces (PMF). The attacks targeted Iran-aligned militants directed by the IRGC to launch over 30 aerial drone attacks in the previous 72 hours, as well as to attack Saudi energy infrastructure, CENTCOM claimed. The strikes destroyed several logistics hubs and weapons storage facilities used by IRGC-backed militias part of the PMF network.

The Saudi Defense Ministry confirmed its participation, stating it reserved the right to defend itself after Iranian-backed militias launched drones at oil facilities in the Eastern Province. Major General Turki Al-Maliki, spokesperson for the Saudi Ministry of Defense, stated that Saudi Arabia coordinated directly with CENTCOM in exercising its right to self-defense under Article 51 of the UN Charter.

PMF reported attacks on their Basra Operations Command around 2 a.m. local time, wounding at least two members.

Tensions also flared in the Red Sea, where Houthi rebels claimed to have fired missiles at a Saudi oil tanker for violating a Houthi blockade, and in the Strait of Hormuz, where the IRGC reported striking three oil tankers.

The region had seen intense fighting since late February, with the U.S. carrying out 13 nights of airstrikes against Iran in late July to degrade its ability to disrupt shipping. President Trump paused the campaign to engage in "very deep talks" with Tehran, warning that failure would result in **"very strong military action."

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UPDATE | Trump Halts US Strikes On Iran, As Clashes Between The Houthis and Saudi Arabian Forces Escalate With Aramco Attack

President Donald Trump ordered a halt to U.S. military strikes on Iran on Friday, ending a 13-day streak of consecutive nightly attacks to create space for diplomatic negotiations. He reportedly met with advisers to discuss potential escalation and weighed whether to launch a "massive attack;" as military officials raised worries about U.S. readiness for wider conflicts with adversaries like China.

The decision came shortly after an Omani delegation arrived in Tehran to discuss reopening the Strait of Hormuz, with Trump telling reporters at the White House he preferred to "make a deal" while keeping the military "locked and loaded."

"We're talking to [the Iranians] right now. I think they're getting more and more serious as the days go by. We're locked and loaded and ready to go, but we're talking to them," Trump said.

Later on Friday, during his remarks at the White House Correspondents Association dinner, Trump said he didn't think Iran is ready to make a deal at the moment, "but I'm willing to listen."

The Israeli security cabinet and Israel Defense Force reportedly expected another round of U.S. strikes on Friday and prepared for a massive U.S. attack that could trigger a retaliatory attack on Israel, Israeli officials say.

Trump's decision comes at a critical juncture as regional conflict spreads, maritime blockades persist, and U.S. ammunition stockpile depletes. Iran has closed the Strait of Hormuz, while U.S. Central Command (CENTCOM) has maintained an active maritime blockade to prevent tankers from entering or exiting Iranian oil terminals (such as Kharg Island).

As part of the blockade operations, U.S. forces targeted non-compliant oil tankers—including firing a Hellfire missile directly into the engine room of a vessel attempting to run the blockade—disabling its propulsion system without sinking the ship. Dozens of vessels have been turned back or redirected, according to CENTCOM.

Meanwhile the conflict is escalating on another front, as Iran-aligned Houthi forces launched coordinated ballistic missile and drone strikes overnight on Saturday, targeting major Saudi Aramco refining facilities in Jizan and Yanbu along the Red Sea. Satellite thermal imaging and geolocated footage confirmed active fires and smoke plumes at the Jizan refinery complex.

With transit through the Strait of Hormuz severely disrupted, attacks on Saudi Arabia's Red Sea oil infrastructure directly threaten alternative export routes, compounding global energy market volatility.

Regional mediators are currently pressing for an extended cease-fire or de-escalation off-ramp, as threat of all out war remains high across CENTCOM's area of responsibility.

The ceasefire broke down in early July 2026 after Iranian forces attacked non-compliant commercial vessels near the Strait of Hormuz, after Tehran accused the US of breaking the memorandum of understanding.

The US responded with renewed strikes on Iranian military targets (air defenses, command sites, small boats, radars, etc.) to protect navigation. This led to multiple nights of US action, Iranian retaliation (including on US bases), and blockade enforcement. CENTCOM conducted strikes on Iran for roughly 13 consecutive nights until Friday, targeting capabilities threatening shipping in the Strait of Hormuz.

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Trump's Jabs At 'War Hawk' Graham, Netanyahu Over Pickaxe Mountain Reports

In separate remarks Tuesday, at the memoraila service, for Senator Lindsey Graham at the Washington National Cathedral, and during a Fox News interview, President Donald Trump addressed foreign policy, the ongoing conflict with Iran, and his personal and political relationships with both the late senator and Israeli Prime Minister Benjamin Netanyahu who was also present at the ceremony along with Ukrainian President Volodymyr Zelenskyy and other top U.S. officials.

Trump affectionately characterized Graham as a man who "liked war" and was "extremely hawkish," saying during the Fox News interview and his eulogy that the senator "never saw a war he didn't like." While the president acknowledged Graham's recent shift toward support for negotiating a deal with Iran, he maintained that the late senator's primary instinct was military action, particularly regarding the conflicts in Iran and Ukraine.

The U.S. president described Graham as a "force of nature" and a "great politician" whose friendship evolved from their 2016 rivalry during the presidential election campaigns. He remembered Graham as a "true American original," a "beloved friend," and a "giant of the United States Senate" who died at age 71.

In the Fox News interview hours before hosting Netanyahu at the White House, Trump aired frustration regarding discussions over Iran.

Trump dismissed reports originating from Israeli sources regarding Iran’s heavily fortified subterranean nuclear facility at Pickaxe Mountain, located near the Natanz complex.

Asked about the reports, Trump said, "I don't need Bibi to tell me [that]... Bibi is telling me that because he wants me to stay involved. We know exactly what's going on." He continued, "I heard Bibi announce that. I said, 'Why didn't you just tell it to me? Why did you have to announce it to the world?' I know exactly what's going on at Pickaxe. It's not a big problem."

Trump also added that while the site remains an issue, "If we don't make a deal, we'll take it out very easily."

The public friction between the two leaders came during a pause in U.S. aerial bombardment against Iranian installations to explore diplomatic options. Netanyahu sought to ensure the U.S. maintained military pressure on the Iran's deeply buried nuclear infrastructure.

Graham's funeral served as an impromptu summit in Washington D.C., bringing together world leaders including Netanyahu and Zelenskyy, both of whom held separate closed-door meetings with Trump at the White House.

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Ukraine Seeks To Avoid 'Escalation' After Strike On Iranian Ship In Caspian Sea: Foreign Minister

Ukrainian Acting Foreign Minister Andrii Sybiha held a "frank" phone conversation with Iranian Foreign Minister Seyyed Abbas Araghchi on Tuesday, following a Ukrainian long-range strike on a vessel in the Caspian Sea that killed one Iranian sailor.

Sybiha asserted that the attack was unintentional regarding civilian targets and emphasized that all Ukrainian actions are aimed solely at countering Russian aggression, accusing Tehran of being a "direct accomplice" to the war by supplying weapons to Moscow.

"I called Iran's Foreign Minister Araghchi for a frank conversation, Sybiha said. "Diplomacy is about direct conversation, even when it's difficult. I stressed that our goal is to avoid unnecessary escalation."

President Volodymyr Zelenskyy announced that Ukraine had struck vessels in the Caspian Sea involved in transporting military cargo from Iran to Russia. In response, Araghchi condemned the strike as a "blatant UN Charter violation" allegedly done at Israel’s behest; he summoned Ukraine’s diplomats, demanded restitution for losses and warned that the attack "cannot go unanswered."

Sybiha said that while the strike targeted military logistics supporting Russia, there was no intent to harm civilians or civilian vessels. He urged Iran to halt support for Russia’s war against Ukraine, and refrain from escalatory steps, asserting that Russia bears full responsibility for all casualties.

In an X post, Araghchi acknowledged Sybiha’s assurance that Ukraine "seeks no escalation" but maintained that any attack on Iranian citizens is unacceptable. He insisted on accountability and restitution, dismissing Ukraine’s claims as "lies" and accusing Kyiv of trying to shift attention from Russia’s attacks on Black Sea shipping.

The Caspian Sea is a strategic supply route between Iran and Russia. This incident marks the first direct link between the war in Ukraine and broader Middle East tensions, with Iran having supplied Shahed drones to Russia since 2022, which have been used in strikes against Ukrainian forces.

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