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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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Tesla Q3 2026 Earnings Call: Company Beats Revenue Expectations

Tesla reported its third quarter (Q3 2026) revenue of $28.05 billion, slightly beating estimates, while non-GAAP EPS of $0.48 exceeded the $0.43 consensus, despite a 56% year-over-year drop in operating income due to heavy spending on AI and Optimus humanoid robots.

Tesla delivered 486,532 vehicles, with CEO Elon Musk saying demand is "exceeding production by a significant margin," driven largely by Full Self-Driving (FSD) interest. While core automotive revenue fell 3% to $20.56 billion, services and other revenue surged 33% to $4.61 billion, hitting a record gross profit.

“We believe that FSD is driving demand in markets where it is available, and we continue to work with regulators to get it approved in other markets,” the company said in its investor deck.

Ashok Elluswamy, Tesla’s vice president of Autopilot, said on the earnings call that the company plans to give some customer cars access to its forthcoming FSD (Unsupervised) systems around the second quarter of next year.

Auto gross margins rebounded to 18.1%, and overall gross margin expanded by 160 basis points to 19.6%, though high R&D costs suppressed net income.

The Cybercab, Tesla’s two-seat autonomous robotaxi, launched unsupervised service in Austin, Texas, with the fleet growing by a factor of 10 since launch.

Tesla plans to expand the Cybercab fleet to Dallas in November and other cities by year-end, with the Robotaxi service expected to contribute financially in 2027. Musk clarified that the Cybercab will primarily operate as a Tesla-owned transport-as-a-service, distinct from consumer vehicles like the Model 3 and Model Y.

The vehicle utilizes 50% fewer parts than other Tesla models, with production ramping at Giga Texas to support both internal fleet needs and future customer deliveries.

“It’s not like going to move the needle this quarter,” Musk said, “I think it starts to become noticeable in Q2 and then probably a big deal by Q3 or Q4 of next year.”

Barring regulatory intervention and protectionism, Musk predicted that Tesla “will end up doing a majority of all passenger miles on Earth in any country where it is allowed to operate freely.”

Tesla maintains its target of 5 million vehicles per year by 2030, with new factories in Berlin and Reno (Semi) supporting this expansion.

Optimus humanoid robots have entered production, with Musk noting that the AI architecture is still being refined to handle open-ended tasks without pre-programmed exoskeletons. Tesla aims to ship Optimus to customers in about a year, targeting an annualized production rate of 20,000 units per week by mid-2027.

An Optimus video demonstrating non-preprogrammed tasks is expected within a month, and the Tesla AI5 chip integration is slated for April 2027.

Capital expenditure for Optimus and AI compute is rising, with Musk highlighting the massive scale of the Terafab chip plant, which will cost tens of billions in equipment shared with SpaceX.

Tesla returned to positive free cash flow of $1.53 billion, down from $3.99 billion in the prior year, while maintaining $45.4 billion in cash and investments. Musk lowered the annual capital spending forecast to about $20 billion, down from the previous $25 billion+ guidance, citing efficiency in current projects.

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October 20, 2026
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Elon Musk Favors SpaceX-Tesla Merger, As Company Beats Revenue Expectations: Q3 2026 Earnings Call

SpaceX reported $14.58 billion in Q3 2026 revenue, a 161% year-over-year increase that significantly beat Wall Street estimates of approximately $12.7 billion. The company achieved its first-ever profitable quarter with $4.4 billion in net income and $0.35 in adjusted EPS, driven primarily by explosive growth in its Artificial Intelligence segment, which saw revenue surge 830% to $7.6 billion.

During the livestreamed Q3 2026 earnings call, CEO Elon Musk, President Gwynne Shotwell and CFO Bret Johnsen discussed Starlink mobile, Starship, AI data center buildout and possible SpaceX-Tesla merger.

Musk said that forming a merger with Tesla would be a "good idea" and confirmed that special committees of independent directors have been established at both companies to discuss the tie-up. He cautioned that the merger is not a certainty and noted the high hurdle of requiring a 50% vote of all Tesla shares.

"I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating,” Musk said, referring to the development of software, chips and more.

“Do I think it would be a good idea? Yes,” Musk said. “But at the end of the day, the shareholders have to be supportive of this.”

Musk said that on the Tesla side, “we will need a 50% vote of all shares -- not just those who vote -- but of all shareholders, and that’s quite a high hurdle.”

The Connectivity segment reported $5.2 billion in revenue with 13.6 million consumer subscribers. Starlink Mobile surpassed 22 million monthly users, with new carrier partnerships activated in countries such as Uganda, the Democratic Republic of Congo, and Costa Rica.

Musk highlighted relentless demand from hyperscalers for SpaceX data centers, citing investments in the Colossus infrastructure and AI offerings like Grok. The AI segment's rapid growth is attributed to cloud services, the acquisition of Cursor, and increased enterprise adoption of Grok. He also said on that SpaceX aims to reach “volume production” of AI chips, now in development with partners Tesla and Intel, during the third quarter of 2028 at the Terafab factory that’s planned in Texas.

SpaceX successfully launched its first revenue-generating Starship mission, deploying 26 Starlink V3 satellites. Musk emphasized the goal of fully recovering the orbital launch vehicle and targeting a crucial orbital refueling demonstration for early 2027.

Johnsen forecasted Q1 2027 revenue between $33 billion and $37 billion, while Musk projected annual recurring revenue could reach $500 billion to $1 trillion by the end of 2027. Capital expenditures came in at $19.59 billion, slightly above estimates but lower than anticipated given the scale of AI investments.

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October 20, 2026
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Bandwagon-5: SpaceX Falcon 9 Deploys Starfall, 31 Other Payloads On Rideshare Mission

SpaceX Falcon 9 launched the Bandwagon-5 rideshare mission on Tuesday (Oct. 20), at 1104 UTC from Space Launch Complex 40 (SLC-40) at Cape Canaveral Space Force Station, Florida, carrying 32 payloads, including the company’s own Starfall reentry capsule.

The Falcon 9 first stage booster B1085 landed on the droneship A Shortfall of Gravitas** in the Atlantic Ocean about nine minutes after liftoff as planned. B1085 previously supported 18 missions including Crew-9, RRT-1, Blue Ghost M1, Fram2, SXM-10, MTG-S1, EchoStar XXV, SXM-11 and 10 Starlink missions.

About 57 minutes after liftoff, the Falcon 9 upper stage started deploying the 32 payloads, with Starfall separating from the upper stage 2 hours and 48 minutes after launch. The payloads include a mix of cubesats and microsats for commercial, government, and research customers across a mid-inclination low Earth orbit.

Standing 0.75 meters tall and 3.1 meters wide, Starfall is a 2,100-kilogram disk-shaped, uncrewed reentry vehicle designed for affordable point-to-point cargo delivery and returning microgravity-manufactured goods. It can return up to 1,000 kilograms of payload to Earth. This flight marked the capsule's second demonstration mission, following its debut on June 23, 2026.

"Starfall enables affordable, routine access to a microgravity environment, providing unique opportunities for on-orbit manufacturing, scientific research, and testing," SpaceX wrote on X.

Starfall wasn't the only reentry capsule on Bandwagon-5. Among the other 31 payloads, was W-Series 7, the latest orbital "mini-factory" built and operated by the California company Varda Space Industries. The W-Series spacecraft are designed to both host the production of valuable goods such as pharmaceuticals and bring them safely down to Earth, the company has said.

The other payloads on Bandwagon-5 are a mix of "cubesats and microsats," according to SpaceX's mission description. Among them are Pelican-12, a sharp-eyed Earth-observation satellite built by the San Francisco company Planet; and payloads from operators such as Tomorrow.io, Capella Space, Umbra Lab, HawkEye 360 (radio-frequency monitoring), Iceye, and Xona Space Systems.

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