Musk's rocket company acquires AI firm and seeks approval for satellites as data centers in space

SpaceX has acquired Elon Musk's AI company xAI, the maker of the Grok chatbot. The deal brings rockets, Starlink, the X platform and Grok together in one company, which Scientific American says is valued at roughly $1.25 trillion.

According to search results from several outlets, the value breaks down to about $1 trillion for SpaceX and $250 billion for xAI. The terms of the deal, such as whether it is a share swap, are not stated in the sources.

Musk has called the combination an "innovation engine" that unites AI, rockets, satellite-based internet and direct-to-mobile communication.

Data centers in orbit

In a memo, Musk writes that today's AI progress depends on large ground-based data centers, which require enormous amounts of power and cooling. Data centers are the big halls of computers that AI runs on. Of solar energy in space, he says: "It's always sunny in space!"

SpaceX has asked the US telecom regulator FCC for permission to launch up to 1 million satellites that would function as orbital data centers. According to the application, the lowest cost of AI computing power within a few years will be found in space, because it avoids the limitations of ground-based deployment.

The satellites are to be solar-powered and connected optically. They are to operate at altitudes of 500-2,000 km.

SpaceX expects to launch 1 million tons of satellites per year. At 100 kW of computing power per ton, that works out to about 100 gigawatts of new AI computing power annually. These are SpaceX's own estimates. The application gives no timeline for deployment.

Caveats

Analysts cited by Via Satellite call orbital data centers speculative as a short-term source of revenue. They point to unproven economics, data transmission latency and few established use cases.

The plan also relies on the Starship rocket, which could potentially launch every hour with about 200 tons per launch. According to Scientific American, however, Starship's ability to reach orbit is still largely unproven, and development is behind schedule. Details of the satellite design are unclear, and SpaceX has provided very few operational details.

In January 2026, the FCC approved an additional 7,500 Gen2 Starlink satellites for SpaceX.