SpaceX acquires xAI. Ever since this merger of Musk’s two companies was rumored, crazy numbers like $1.5 trillion started being thrown around when discussing the total value of SpaceX, so you could sum it up as “Combining SpaceX and xAI gets you the biggest IPO ever!” and yes, that is heard more now than ever. For reference, SpaceX was valued at around $800 billion less than two months ago.
But is this combination as silly as it sounds?
The combined company will be a “vertically integrated innovation engine,” according to a new SpaceX report with Elon Musk’s personal signature on it. In his view, the company is now dealing with “AI, rockets, space-based internet, direct device and mobile communication and the world’s leading real-time information platform and free speech platform.” Another way to say this might be that SpaceX is now the company that supports rocket boosters that land on the ground, most of the satellites that exist today, fat rockets that often explode, an ISP, a microblogging app known as X, a sassy chatbot called Grok that is famous for pornographic images, and much more.
SpaceX will now own, for example, Grokipedia, an AI-written, anti-woke parody of Wikipedia. And remember Vine, the defunct 6-second social media app? Of course SpaceX, which has billions of dollars in Pentagon contracts and is responsible for NASA’s crewed missions, now owns the rights to Vine as well. Musk says he’s bringing it back “in AI form.”
As many have said before me, SpaceX became a truly important player in the human space and space travel efforts through a repetitive process that included an incredible number of public rocket explosions that would have been almost unbearable if SpaceX had been a government agency. It always walks a tightrope, keeping boring people happy, while being subject to the silly and scary stuff that comes with being driven by Elon Musk.
Gwynne Shotwell, president and COO of SpaceX, was described by the Wall Street Journal as “a translator for Musk, especially for executives who rely on SpaceX but are sometimes intimidated by his activities.” In that Journal article, former NASA administrator Bill Nelson—also a former Democratic senator—called Shotwell a “strong hand” at the company, adding, “I have a lot of confidence in him. Because of that, I have a lot of confidence in SpaceX.”
Back in 2022, when Musk was in the midst of buying Twitter in the most outrageous way possible, Nelson says he called Shotwell, and said, “Tell me that the disruption that Elon might have at Twitter is not going to affect SpaceX.”
“I assure you, it is not,” he told her. “You have nothing to worry about.”
Now imagine you are Shotwell four years later. Twitter is now X. Last year, X’s proprietary AI chatbot briefly started calling itself “MechaHitler” at one point, then produced tons of dressed-up photos of children. So not only is the drama ramping up, but he’s the president and COO of a company that does all those things too.
And imagine that Shotwell has to deal with this encounter while Musk, the celebrity-hungry CEO of this organization has spent the last few days trying to get out of any fallout or disapproval brought on by the public disclosure of emails in which he repeatedly asked Jeffrey Epstein if he could throw a party on his private island.
So one can only guess what Musk’s state of mind was when he finalized plans for this merger. But what stands out to me is that he wants investors in xAI and SpaceX—and perhaps starting in June, future holders of SpaceX’s publicly traded stock—to believe that this merger creates a company that gels and has a unified agenda. But you might want to take as big a bong rip as you can before you try to get your head around that agenda as Musk explained it in his press conference:
This rocket and AI company will be an AI-in-space company, you see, because, according to Musk’s estimate, “within 2 to 3 years, the cheapest way to produce an AI computer will be in space.” After all, “in the long term, space-based AI is clearly the only way to scale.” Obviously.
But the training models with the space computer are just the beginning, because Musk says that by combining the two ideas, they will be “stepping up the scale to make a soft sun to understand the Universe.”
Companies don’t always have to make sense. Samsung owns hotels. Red Bull has an environmental magazine. Konami has aerobics gyms. Sometimes this conflict is a flourishing remnant of a different era of the company, but sometimes it reveals the volatility or stupidity of the company’s leadership, which can be a big deal.
But then again, it’s not easy to imagine that Elon Musk’s power—and the fact that a small group of economically powerful Wall Street bulls think caprice is the same as wisdom—could command the world’s most funded AI company at a time when AI is a load-bearing structure that lifts the entire economy. If the IPO goes well (New York Times sources say Musk hopes to raise $50 billion), that AI company will be in your 401(k) while also managing the lives of astronauts.
In other words, we are headed for a time when Wall Street bulls will have to be right. More than ever Elon Musk’s caprice is possible must in fact it has been wise, as unbelievable as it can be. AI had better not be a bubble if this IPO goes well, and Musk’s own stock had better be boosted as well. Our entire well-being may depend on it.
