Elon Musk is officially fusing rockets and artificial intelligence. SpaceX and xAI are merging into one company, with plans to eventually go public at a reported $1.25 trillion valuation. The long-term vision is as bold as it sounds: putting AI data centers in space.
AI… Powered by the Sun
Musk says today’s AI boom is limited by Earth. Massive data centers need huge amounts of electricity and cooling, and he argues the planet simply cannot keep up without straining power grids and communities. His solution is space-based computing, where satellites could tap near-constant solar energy with lower operating and maintenance demands.
In theory, orbiting AI infrastructure could remove one of the biggest bottlenecks facing the industry: energy. In practice, building, launching, and maintaining data centers in space would be one of the most complex engineering challenges ever attempted.
Still, it fits Musk’s pattern of chasing problems most companies would not even consider touching.
A Trillion-Dollar Tech Stack
The merger ties together two of Musk’s most ambitious private companies. Under one roof, you now have rockets, satellites, advanced AI models, and deep integration with the broader Musk ecosystem. Reports previously suggested Tesla $TSLA might be folded into a broader structure, but it was not included in this deal and its shares were roughly flat after hours.
If the combined SpaceX and xAI goes public at a $1.25 trillion valuation, it would instantly rank among the ten most valuable public companies in the US. For context, the largest IPO ever by valuation remains Saudi Aramco, which debuted around $1.9 trillion in 2019.
The Musk Flywheel Gets Bigger
This move highlights how interconnected Musk’s empire already is. Tesla $TSLA ( ▼ 0.48% ) recently invested $2 billion into xAI, and SpaceX’s satellite and launch capabilities could theoretically support a future space-based AI network.
Whether space data centers become reality or remain a sci-fi dream, the market may focus first on something simpler: one of the biggest and most unusual IPO stories the tech world has ever seen.