Elon Musk has officially consolidated his business empire by merging his aerospace giant, SpaceX, with his artificial intelligence startup, xAI. The merger, finalized on February 2, 2026, creates a corporate colossus valued at approximately $1.25 trillion and sets the stage for a massive initial public offering (IPO) expected later this year.
The primary objective of this vertical integration is the deployment of space-based data centers. Musk argues that the rapidly growing energy and cooling demands of AI can no longer be sustained on Earth without straining power grids and local environments. By moving computation to orbit, the new entity plans to utilize near-constant solar energy and the natural cooling of space. Musk estimated that within two to three years, the most cost-effective way to generate AI compute will be in space.
To achieve this “orbital brain” vision, SpaceX has already requested permission from the U.S. Federal Communications Commission (FCC) to launch up to one million satellites. These units will function as solar-powered server racks, networked via laser links to form a planetary-scale computer. The deployment will rely on the massive lift capacity of the Starship rocket, which Musk noted is nearing a launch cadence that can support such a gargantuan infrastructure project.
The deal further unifies the “Muskonomy,” bringing together SpaceX’s rockets and Starlink internet, xAI’s Grok chatbot, and the social media platform X (formerly Twitter). While the merger consolidates Musk’s private ventures, it also creates a strategic “innovation engine” that bridges the gap between terrestrial data and extraterrestrial infrastructure.
Critics and industry leaders, including Microsoft President Brad Smith, have expressed skepticism about the feasibility of shifting massive AI workloads to orbit. However, Musk remains undeterred, framing the move as a necessary step toward becoming a “Kardashev II-level civilization” capable of harnessing the full energy of the sun. The combined company is now positioned as the world’s most valuable private firm, significantly outpacing rivals like OpenAI in the race for AI supremacy.
