Elon Musk is merging SpaceX and xAI to build data centers in space — or so he says

Elon Musk announced a merger between SpaceX and xAI, valued at $1.25 trillion, claiming it is necessary to scale AI by moving data centers into space to avoid terrestrial power and environmental concerns. While space-based data centers are a growing interest for Big Tech, a simpler motivation might be that SpaceX is highly profitable, while xAI is experiencing a significant cash burn, spending about $1 billion monthly to compete with rivals like OpenAI and Google.

This move echoes Musk's 2016 merger of SolarCity with Tesla, which faced shareholder lawsuits alleging a bailout, and Musk currently faces a separate lawsuit from Tesla shareholders over the formation of xAI. The technical feasibility of space data centers is questionable due to the immense power demands of GPUs and complex communication logistics. The merger complicates matters for Tesla shareholders, as Tesla has already invested $2 billion into xAI, and investor sentiment remains wary of Musk potentially using Tesla's publicly traded capital to fund his private ventures.

(Source：The Verge)