"SpaceX has acquired xAI to form the most ambitious vertically integrated innovation engine, both on and off Earth, encompassing AI, rockets, space-based internet, direct communication with mobile devices, and the world’s leading platform for real-time information and freedom of expression," Musk explained in a statement.

The tycoon stressed in the statement that the global demand for electricity for AI cannot be met "with terrestrial solutions" without harming communities and the environment; therefore, "space-based AI is the only way to scale" in the long term.

According to Musk, launching one million tons of satellites per year would add 100 gigawatts of AI computing capacity, with no ongoing operations or maintenance required.

Therefore, he predicted that within two or three years, the most economical way to generate AI computing power will be in space.

"This cost-effectiveness will allow innovative companies to advance in training their AI models and processing data at unprecedented speeds and scales," he emphasised.

Musk also discussed a new constellation of satellites that will be based on a space sustainability design and "well-established" operational strategies, such as their destruction at the end of their useful life.

The entrepreneur, who also owns the social network X, emphasised that although launching AI satellites from Earth is his short-term goal, the capabilities of his Starship rocket system will also allow operations in other locations, such as the Moon.

"Once there, it will be possible to establish a permanent presence for scientific and manufacturing activities," Musk noted, underlining that lunar factories can leverage the Moon's resources to manufacture satellites and deploy them into space.

According to Bloomberg, the resulting company is expected to go public through an initial public offering (IPO) valued at approximately $1.25 billion.

xAI, which merged with the social network X in 2025, is currently facing a series of investigations in Europe, India, and the state of California for using its artificial intelligence, Grok, to generate sexually explicit content, including images that may involve minors.

Meanwhile, SpaceX, founded in 2002 by Musk, has become NASA's main provider of launch services and also owns Starlink, which has more than 9,000 satellites in orbit, according to CNBC.