Elon Musk Plans to Merge SpaceX and xAI
SpaceX CEO Elon Musk is reportedly planning to merge his artificial intelligence company xAI with his space company SpaceX and subsequently take the company public. This move is being linked to the goal of establishing a data center in space.
Merger Plan and IPO Strategy
It has been reported that Elon Musk, known for groundbreaking moves in the technology and space sectors, has taken a step towards merging two companies he owns. According to Reuters, Musk plans to merge the artificial intelligence venture xAI with the space transportation and satellite internet company SpaceX. This merger is targeted to be completed before a process planned for June, which envisions taking SpaceX public through an Initial Public Offering (IPO) that would value the company at $1.5 trillion.
The Idea of a Space Data Center and Other Companies
The rationale behind the plan is cited as the idea of moving xAI's data centers to Earth's orbit using SpaceX's infrastructure. In a statement made in Davos last week, Elon Musk said, 'The lowest-cost place to situate AI will be in space, and this will become a reality within at most two, three years.' Musk is not the only figure focused on this idea. While Jeff Bezos's Blue Origin also plans to launch thousands of satellites to serve data centers in space, Google CEO Sundar Pichai has expressed the view that orbital data centers could benefit from nearly unlimited solar energy. However, experts warn that these plans may not be practical in reality due to economic feasibility and bandwidth limitations.
Financial and Structural Details
Regarding the merger process, it is stated that two separate legal entities have been established in Nevada, and these structures were created to facilitate a stock swap between xAI and SpaceX. According to a Reuters source, xAI executives could also receive cash payments instead of SpaceX shares under the agreement. It is known that SpaceX invested $2 billion in xAI last year. Additionally, both companies hold significant defense contracts with the Pentagon. SpaceX is developing a national security internet network called Starshield, which is capable of AI-assisted target tracking.
Past Merger Moves and Expanding Structure
Elon Musk is no stranger to merging his companies. Last year, he integrated the social media platform X (formerly Twitter) into xAI. It was also announced this week that electric car manufacturer Tesla has agreed to invest $2 billion in xAI. These moves by Musk, which regulate the flow of resources and investments between his companies, are interpreted as part of his strategy to further integrate his broad technology portfolio.
