Musk makes a pivotal strategic move on the eve of his business empire's IPO.
SpaceX has officially announced the completion of its acquisition of xAI. Disclosed information indicates that in this transaction, SpaceX was valued at approximately $1 trillion, while xAI was valued at around $250 billion, resulting in a combined valuation of $1.25 trillion.
This merger constructs an irreplicable moat for Musk: forming a vertically integrated closed loop of "launch capability (SpaceX Starship) + communication network (Starlink) + AI brain (xAI's Grok)." This represents an infrastructure dimension that competitors like OpenAI and Google cannot reach in the short term. It is also a crucial part of Musk's internal asset consolidation, piecing together a grand vision of an "AI + space infrastructure" foundation.
According to Musk's plan, SpaceX is set to IPO this year. Previous market assessments suggested a target valuation exceeding $1.5 trillion, but following this merger, some commentators now believe the valuation could surge towards $4 trillion, heralding what would truly be the largest IPO in global history. This merger injects nuclear-powered momentum into the super-IPO: the narrative of a "rocket launch company" has its limits, but the epic story of "building space-based AI infrastructure for human civilization" can push the valuation ceiling to its extreme.
This is a classic case of "cash flow (SpaceX) acquiring imagination (xAI)." It places an AI story facing real financial pressures into a space platform with engineering prowess and a cash flow foundation, jointly pointing towards an ultimate narrative of cosmic exploration, aiming to catalyze the largest and most imaginative capital event in human history. It also creates a clear exit path for xAI investors (such as Nvidia, Fidelity, etc.) by converting their shares into the soon-to-be-listed SpaceX stock.
The following is the full text of the memorandum in both languages:
xAI joins SpaceX to Accelerate Humanity’s Future
SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, encompassing AI, rockets, space-based internet, direct-to-mobile device communications, and the world’s foremost real-time information and free speech platform. This marks not just the next chapter, but the next volume in SpaceX and xAI's mission: scaling to create a sentient sun to comprehend the Universe and extend the radiance of consciousness to the stars!
Current advances in AI are heavily reliant on massive terrestrial data centers, which consume immense amounts of power and require extensive cooling. Global electricity demand for AI cannot be met by terrestrial solutions alone, even in the near future, without imposing significant strain on communities and the environment.
In the long term, space-based AI is unequivocally the only viable path for scaling. Harnessing even one-millionth of our Sun's energy would yield over a million times more power than our entire civilization currently consumes!
The only logical solution, therefore, is to relocate these resource-intensive endeavors to a domain with virtually limitless power and space. I mean, space is called 'space' for a very good reason. 😂
By directly tapping into near-constant solar power with minimal operational or maintenance costs, these satellites will fundamentally transform our capacity to scale computational resources. It's always sunny in space!
Deploying a constellation of a million satellites functioning as orbital data centers represents the initial stride toward achieving a Kardashev Type II civilization—one capable of harnessing the Sun's full energy output, supporting AI-driven applications for billions of people today, and securing humanity's multi-planetary future.
In the annals of spaceflight, no vehicle has ever existed that could launch the megatons of mass required for space-based data centers, permanent lunar bases, or Martian cities. Even in 2025, a record-breaking year for orbital launches, only approximately 3,000 tons of payload reached orbit, predominantly comprising Starlink satellites delivered by our Falcon rockets.
The imperative to launch thousands of satellites into orbit served as a forcing function for the Falcon program, driving iterative improvements to achieve the unprecedented launch rates necessary to realize space-based internet. This year, Starship will commence deploying the far more powerful V3 Starlink satellites, with each launch adding over twenty times the capacity to the constellation compared to current Falcon launches of V2 Starlink satellites. Starship will also launch the next generation of direct-to-mobile satellites, which will provide comprehensive cellular coverage across the entire Earth.
While the need to launch these satellites will similarly drive Starship enhancements and launch frequency, the sheer quantity of satellites required for space-based data centers will propel Starship to even greater capabilities. With launches occurring hourly, each carrying 200 tons per flight, Starship could deliver millions of tons to orbit and beyond annually, paving the way for an exhilarating future where humanity ventures out among the stars.
The fundamental calculation is straightforward: launching one million tons of satellites per year, each ton generating 100 kW of computing power, would add 100 gigawatts of AI computational capacity annually, with no ongoing operational or maintenance requirements. Ultimately, a pathway exists to launch 1 terawatt per year from Earth.
My estimation is that within 2 to 3 years, the most cost-effective method for generating AI compute will be in space. This cost efficiency alone will empower innovative companies to advance rapidly in training AI models and processing data at unprecedented scales and speeds, accelerating breakthroughs in our understanding of physics and the invention of technologies that benefit humanity.
This new constellation will build upon well-established space sustainability design and operational strategies, including end-of-life disposal protocols, which have proven successful for SpaceX's existing broadband satellite systems.
While launching AI satellites from Earth is the immediate priority, Starship's capabilities will also enable operations on other celestial bodies. Thanks to advancements like in-space propellant transfer, Starship will be capable of landing massive payloads on the Moon. Establishing a permanent presence there will unlock opportunities for scientific research and manufacturing endeavors. Lunar factories could leverage local resources to manufacture satellites for deployment deeper into space. Utilizing an electromagnetic mass driver combined with lunar manufacturing could enable the placement of 500 to 1,000 terawatts per year of AI satellites into deep space, significantly advancing the Kardashev scale and harnessing a substantial fraction of the Sun's power.
The capabilities unlocked by making space-based data centers a reality will fund and enable self-sustaining bases on the Moon, a full-fledged civilization on Mars, and ultimately, expansion throughout the Universe.
Thank you for everything you have done and will do for the light cone of consciousness.
Ad Astra! Elon
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