Musk Merges xAI Into SpaceX to Build AI Systems in Orbit

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Elon Musk Merges xAI Into SpaceX to Launch AI Projects Beyond Earth

Written by Aaron S.,

Editor-In-Chief

Last Updated: February 03, 2026

Key Takeaways

Elon Musk moved xAI under SpaceX to expand artificial intelligence work beyond Earth;
He said power and cooling limits on Earth make large AI systems hard to scale;
Musk plans to use satellites and Starship rockets to build AI data centers in space.

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Elon Musk Merges xAI Into SpaceX to Launch AI Projects Beyond Earth

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Elon Musk has decided to bring xAI, his artificial intelligence (AI) project, under the control of his space company, SpaceX.

Musk had already combined xAI with his social media platform X. Now, with SpaceX owning xAI, he aims to move advanced AI work beyond Earth.

In a statement on SpaceX’s website, Musk said the change was driven by limits on power and cooling systems on Earth. The deal's price was not disclosed, but The Information reported that SpaceX paid around $250 billion.

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According to Bloomberg, this raises SpaceX’s total value to about $1.25 trillion.

His plan is to create a large network of satellites that would act as data centers in space. These would handle computing tasks that are currently limited by Earthly conditions.

This idea depends on Starship, SpaceX’s next-generation rocket. The vehicle has not yet proved consistent after a test explosion over Turks and Caicos last year.

Musk noted that about 3,000 tons of payload were delivered to orbit in 2025, mainly using Falcon rockets. He believes Starship will make it possible to send much larger loads in the future.

Musk added that “within two to three years, the lowest cost way to generate AI compute will be in space".

Recently, xAI has been looking for a crypto professional to help its AI system better understand digital markets. What did the company say? Read the full story.