(C) WCCFTech

HAWTHORNE, CA — Elon Musk, the visionary CEO of SpaceX and Tesla, has officially announced that SpaceX will acquire his artificial intelligence venture, xAI. The merger of the two private giants is set to create a technological powerhouse with a projected valuation of $1.25 trillion, marking a historic shift toward vertical integration across the aerospace and AI industries.

A Vertical Revolution: From Earth to Orbit
In a statement released on the SpaceX website, Musk described the merger as the birth of a "vertically integrated innovation engine" capable of operating both on and off the planet. According to sources cited by Bloomberg and Reuters, the transaction values SpaceX at $1 trillion and xAI at $250 billion, with shares of the combined entity expected to trade at approximately $527 per share.

The move comes as SpaceX prepares for a potential Initial Public Offering (IPO) later this year. While there had been speculation regarding a possible merger with Tesla, analysts suggest that merging two private entities—SpaceX and xAI—presented far fewer regulatory hurdles than incorporating a publicly traded automaker.

The "Space Data Center" Vision
The core driver behind this acquisition is Musk’s ambitious plan to build Space-based Data Centers. Musk argues that terrestrial power grids will soon be unable to keep up with the exponential electricity demands of advanced AI. His solution? Moving the compute into orbit.

"The only way to scale AI sustainably in the long term is through space-based technology," Musk stated. "By utilizing direct solar energy in orbit, we can bypass the energy constraints and cooling challenges faced by ground-based facilities."
The technical roadmap is staggering. Musk envisions:

Launching 1 million tons of satellite hardware annually.
Achieving 100 kW of computing capacity per ton.
Adding 100 GW of AI compute capacity every year, with an ultimate goal of reaching 1 Terawatt (TW).
Musk predicts that within the next two to three years, space will become the most cost-effective environment for high-level AI computation. To kickstart this, SpaceX recently filed an application with the Federal Communications Commission (FCC) to launch 1 million satellites dedicated to orbital data processing.

Funding the Future: Mars and Beyond
The revenue generated from these orbital data centers is not just for profit. Musk intends to funnel the capital and technological breakthroughs into his ultimate goal: establishing permanent bases on the Moon and Mars.

However, the path forward is not without obstacles. Regulatory bodies are expected to scrutinize the deal closely. With Musk already overseeing X (formerly Twitter), Tesla, SpaceX, and now a massive AI-integrated aerospace firm, concerns regarding technological monopolies and the concentration of power are likely to trigger intense oversight from global antitrust authorities.

Despite these challenges, the merger represents a definitive bet on a future where AI and space exploration are inextricably linked—a future Musk believes is the only way for humanity to expand its reach across the stars.