Musk merges SpaceX and xAI firms, plans for space-based AI data centres

Musk says solar powered and space-based data centres are the only way to meet AI’s burgeoning energy demands.Published On 3 Feb 2026Elon Musk’s SpaceX has acquired his AI company xAI as part of an ambitious scheme to build space-based data centres to power the future of artificial intelligence.The billionaire, who is also the CEO of Tesla, announced the merger in a statement on Tuesday on the SpaceX website.Recommended Stories list of 4 itemslist 1 of 4Russia-Ukraine war: List of key events, day 1,440list 2 of 4Ex-US President Bill Clinton, Hillary Clinton to testify in Epstein probelist 3 of 4Cuba in contact with US, diplomat says, as Trump issues threat to block oillist 4 of 4UK police to review misconduct claims after Mandelson’s leaks to Epsteinend of listMusk said the merger will help to address the emerging question of how to meet the power-hungry demands of artificial intelligence.AI demand will require “immense amounts of power and cooling” that are not sustainable on Earth without “imposing hardship on communities and the environment,” he said.Space-based data centres that harness the power of the Sun are the only long-term solution, according to Musk.“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilisation currently uses!” he wrote.“The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space,” he continued, predicting that within the next “2 to 3 years, the lowest cost way to generate AI compute will be in space”.The merger of SpaceX and xAI will bring several of Musk’s space, artificial intelligence, internet, and social media projects under one roof.SpaceX operates the Falcon and Starship rocket programmes, while xAI is best known for developing the AI-powered Grok chatbot. Last year, xAI also acquired X, the social media platform known as Twitter, until it was bought by Musk in late 2022.