On February 3, Elon Musk made a groundbreaking announcement: SpaceX had successfully acquired the artificial intelligence firm xAI. The newly merged entity is now valued at a staggering $1.25 trillion, with SpaceX contributing $1 trillion and xAI adding $250 billion to the valuation.

The strategic move behind this acquisition is to forge a seamless integration of cutting-edge technologies, including AI, rocket science, and space-based internet services. The goal is to establish the most formidable innovation engine, not just on Earth but also in the vast expanse of space.

Furthermore, the acquisition paves the way for the deployment of data centers in space. This innovative approach is designed to tackle the power and environmental challenges posed by the skyrocketing demand for ground-based AI computing resources.

Musk elaborated that space-based data centers will harness the boundless energy of the sun and the vacuum environment of space to enable virtually unlimited expansion of computing power. He anticipates that within the next 2-3 years, this approach will emerge as the most cost-effective solution for AI computing power.