Elon Musk merges SpaceX, xAI to build space data centers. What to know

Elon Musk is merging his SpaceX rocket company with his artificial intelligence startup known as xAI in a move meant to push forward the mogul’s agenda of building data centers in space.

The record-setting deal, which Musk announced Monday, brings together two segments of Musk’s business empire amid reports that the world’s richest man plans to take SpaceX public in 2026.

The startup xAI, which Musk founded in 2023 and chairs as the chief executive, is best known as the maker of the Grok chatbot. In a lengthy post on SpaceX’s website, Musk said combining SpaceX and xAI is intended to advance his goal of using the company’s Starship rocket to build orbital data centers that he argues could be a more efficient alternative to terrestrial facilities.

Here’s everything to know about SpaceX, xAI and how the merger of two of Musk’s ventures are part of his longterm plan for space-based data centers.

What is SpaceX? Does Elon Musk own it?

SpaceX is the commercial spaceflight company that Elon Musk, the world’s richest man, founded in 2002. Musk, a former close adviser of President Donald Trump, is also the chief executive of SpaceX.

SpaceX’s Falcon 9 – the most active rocket in the world – is used on a variety of missions, including deployments of the company’s Starlink internet satellites from Florida and California. With nearly 10,000 satellites in its growing orbital constellation, Starlink has become a lucrative part of Musk’s business empire, serving millions of customers around the world.

SpaceX additionally benefits from billions of dollars in contracts from the Department of Defense by providing launch services for classified satellites and other payloads. The Falcon 9 rocket also helps launch NASA’s human spaceflight missions to the International Space Station.

What is xAI? Musk to merge artificial intelligence company with SpaceX

The merger of xAI with SpaceX is regarded as a blockbuster deal that valued the combined entity at $1.25 trillion, Reuters reported.

The company xAI is perhaps best known for developing its Grok AI chatbot, which began as a feature on Musk’s social media platform X – acquired by Musk in 2022 when it was known as Twitter. A landing page for xAI is already visible on SpaceX’s website.

What are orbital data centers?

The business merger is in line with Musk’s goal of building data centers in space, with the envisioned deployment of one million satellites to operate the infrastructure.

Musk believes orbital data centers to be a more efficient method to run artificial intelligence systems on Earth, as compared to ground-based data centers that he said are too costly and detrimental to the environment.

“In the long term, space-based AI is obviously the only way to scale,” he wrote, adding that orbital data centers would be able to harness the “near-constant” solar power. “It’s always sunny in space!”

Where is SpaceX based in Texas? Starship launches from Starbase

Launching megatons of payload required to deploy something as imposing as a spaced-based data center requires an equally imposing spacecraft. That’s where SpaceX’s gargantuan Starship comes in.

SpaceX, which has been launching the 400-foot Starship on a series of test flights since 2023 from its Starbase headquarters in South Texas, is preparing to debut a new, more powerful version of the rocket in 2026.

In the years ahead, Starship is due to help NASA astronauts land on the moon under the U.S. space agency’s Artemis program. Musk, who has often spoken about the need to colonize other planets, also has dreams of Starship being the vehicle that transports the first humans to Mars.

Now, Musk is laying out his plans for Starship to not only help soon launch larger Starlink satellites, but the satellites needed for orbital data centers.

“With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year, enabling an exciting future where humanity is out exploring amongst the stars,” Musk wrote.

How much is Elon Musk’s net worth? Is Musk a trillionaire?

Musk is not yet a trillionaire, although there’s a chance he could become one after Tesla shareholders agreed to grant him shares worth trillions in November 2025 if the company reaches its financial and operational goals in the next decade.

As of 2025, Musk has a net worth estimated to be more than $490 billion, according to Forbes.