Elon Musk's SpaceX is taking over his artificial intelligence (AI) start-up, as the billionaire continues to unify some of his many business interests.
SpaceX confirmed the deal to acquire xAI, a smaller firm known for its Grok chatbot, posting a memo from Musk about the merger on its website.
In the note, Musk stated that the combination would form an 'innovation engine' that brings together AI, rockets, space-based internet, and media under one umbrella.
The terms of the deal were not disclosed. However, a source familiar with the situation indicated it valued xAI at $125 billion and SpaceX at $1 trillion, making it the most valuable private company in history.
Last month, Musk's electric car company Tesla also announced a $2 billion investment in xAI. He noted at the time that he envisioned xAI operating as an 'orchestra conductor' for Tesla factories employing autonomous robots.
In conjunction with these developments, Musk indicated that Tesla would cease production of two car models to focus on producing robots, marking a significant shift for the company.
Despite shareholder concerns regarding funding to another of Musk's enterprises, Tesla moved ahead with the xAI investment, which faced skepticism among investors.
SpaceX is reportedly working towards a public company listing, with analysts interpreting the xAI acquisition as a strategic step toward that goal. Emily Zheng, a senior analyst at Pitchbook, suggested that combining these entities prepares SpaceX for a capital-efficient narrative that appeals to public investors.
Musk has emphasized that advancements in space technology could address the energy needs of AI firms. He noted, 'In the long term, space-based AI is obviously the only way to scale,' with an immediate focus on launching AI satellites.
The ambition behind the merger includes financing and supporting self-sustaining bases on the Moon and even Mars, reinforcing Musk's broader goal of interplanetary civilization expansion.
Neuralink and The Boring Company are the only two of Musk's companies that remain independent, and xAI began as part of X, formerly Twitter, with its access to real-time data serving as a foundation for AI training.
As rumors swirl, it appears that xAI's foundational product Grok is already facing scrutiny regarding potentially improper uses of its AI image generation features.
