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SpaceX Acquires xAI
00:21:23
As SpaceX acquires xAI, all of Elon’s companies under one umbrella is pretty much an inevitability isn’t it? What is with this weird game of chicken that Nvidia and OpenAI and now Oracle are all engaging in all of the sudden. And self-driving cars are about to be ubiquitous, indication number 37.
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Welcome to the Tech Brew Ride home for Tuesday, February 3rd, 2026. I'm Brian McCullough. Today, as SpaceX acquires XAI, all of Elon's companies under one umbrella is pretty much an inevitability now isn't it? What is it with this weird game of chicken that Nvidia and OpenAI and now Oracle are all engaging in all of the sudden and self driving cars are about to be ubiquitous. Indication number 37 here's what you missed today. In the world of tech, Attackers don't need exploits when they use your allowed tools against you. That's why ThreatLocker enforces default deny at execution, stopping unknown software scripts and ransomware the moment it tries to run. No signatures, no guesswork, just control. Threatlocker takes zero trust from theory to practice. By blocking any unauthorized application or behavior from ever running in the first place. Generative AI has lowered the barrier to malware creation. So ThreatLocker prevents AI generated polymorphic and fileless attacks by shutting down unknown behavior automatically, even if it's never been seen in the wild. Threat Locker gives you tight control without the noise, meaning fewer alerts and a cleaner, predictable operational posture. Learn more@threatlocker.com TechBrewRideHome that's threatlocker.com TechBrewrideHome SpaceX has acquired Xai. Sources say the deal is all in stock and values the company at $1.25 trillion, with SpaceX valued as $1 trillion worth of that and x $250 billion worth of that. Quoting Bloomberg SpaceX said it acquired XAI to form the most ambitious vertically integrated innovation engine on and off earth with AI, rockets, space based Internet, direct to mobile device communications and the world's foremost real time information and free speech platform, end quote. The company is still expecting to hold an initial public offering later this year. One of the people said SpaceX had been planning an IPO that could raise as much as $50 billion in what would be the biggest initial share sale to date. The combined firm's shares are expected to be worth $526.59 each, according to some of the people who asked not to be identified as the information isn't public. The deal is all stock, one of the people said, end quote, quoting Ars Technica. The merging of what is arguably Elon Musk's most successful company, SpaceX, with the more speculative Xai Venture is a risk. Founded in 2023, Xai's main products are the generative AI chatbot Grok and the Social Media, formerly known as Twitter. The company aims to compete with OpenAI and other artificial intelligence firms. There can be no question that the merger of SpaceX, the world's premier spaceflight company, and the artificial intelligence firm offer potential strategic advances. Musk strongly believes that artificial intelligence is central to humanity's future and wants to be among those leading in its development. With this merger, he plans to use SpaceX's deep expertise in rapid launch and satellite manufacturing and management to deploy a constellation of up to 1 million orbital data centers. This will provide the backbone computing power needed to support xai's operations. Musk's plan for the merged companies is predicated on several assumptions, including that AI is not a bubble, but rather a technology that will be fully embraced in the future, that orbital data centers are cost competitive compared to ground based data centers, and that compute is the essential roadblock that must be solved for widespread adoption of AI by society. If these assumptions are true, the merged SpaceX XAI company holds a powerful position. It could potentially own a full stack of capabilities from launch to orbital bandwidth to frontier AI models. With Starlink Internet, it could provide AI on demand anywhere in the world to any mobile device. SpaceX already has the world's workhorse reusable rocket with the Falcon 9. It can presently deliver about 20 tons to low Earth orbit for an initial cost of $15 million, compared to more than four or five times that on the open market. Moreover, SpaceX is working toward fully reusable super heavy lift rockets with its Starship vehicle. The privately held company also operates more satellites, about 9,600 than any other country or company in the world by a factor of 10. It has extensive operations not just in deploying but also in operating this constellation over the last decade. This is not a simple capability. I would say there have been as many engineering advancements in orbital safety and collision prevention in the last 10 years as there have been advances in rocketry, and that may have gone unnoticed, said Brian Weeden, director of civil and commercial policy at the Aerospace Corporation, in an inter. In an email to SpaceX employees on Monday, Musk said Starship will begin launching V3 Starlink satellites into orbit this year, as well as the next generation of direct to mobile satellites. The launches, he said, will be a forcing function to improve the performance of Starship, making it more rapidly reusable for data center deployment. The sheer number of satellites that will be needed for space based data centers will push Starship to even greater heights, Musk wrote, With launches every hour carrying 200 tons per flight. Starship will deliver millions of tons to and beyond per year, enabling an exciting future where humanity is out exploring among the stars. Musk told employees that launching 1 million tons per year of satellites generating 100 kilowatts of compute power per ton would add 100 gigawatts of AI compute capacity annually with no ongoing operational or maintenance needs. Ultimately, Musk believes there is a path to launching 1 terawatt per year from Earth. My estimate is that within 2 to 3 years the lowest cost way to generate AI compute will be in space, musk wrote. This cost efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity. Musk is clearly bullish on the future of AI and on space's potential to address the voracious power needs of AI data centers. Many people in the AI industry speculate that our artificial intelligence is likely to go through serious and sustained growing pains, or doubt that space based data centers can compete with operations built on the ground. But Musk, more than anyone, has the means to press forward the bull case for space based AI, and he is going for it. Monday's merger follows an ultra ambitious filing on Friday with the Federal Communications commission in which SpaceX sought permission to launch 1 million satellites that will operate as orbital data centers. The company said it would deploy the satellites to orbits with an altitude between 500 and 2000 K at 30 degree and sun synchronous inclinations. SpaceX also recently announced its plans to deploy a space situational awareness system called stargaze that will use star trackers to provide data to potential conjunctions between satellites in orbit. The goal is to help deconflict satellite trajectories and avoid collisions in low earth orbit. This is all happening really fast, said Victoria Sampson, chief director of space security and stability for Secure World foundation, in an interview. Sampson said that at present, satellites have large bubble of space around them when it comes to collision detection. This is because of uncertainties in the precise location and movement of vehicles. If you improve space situational awareness, such as what SpaceX seeks to do with Stargaze, those bubbles could be shrunk to reduce the number of potential collision warnings, but that will come with risks. There's a lot of room in space, of course, sampson said. But the question is, how much risk do you want to take? One of the many questions raised by the new merger is whether SpaceX has lost its way. Musk founded the company in 2002 with a singular purpose of settling Mars, an audacious if not impossible goal at the time. In the decades since SpaceX has made credible progress toward Mars, and with Starship, humanity has for the first time a transportation system potentially capable of landing humans on the red planet. But acquiring an AI company and putting so much effort into orbital data centers, is this consistent with the Mars mission? Musk clearly thinks it is. While launching AI satellites from Earth is the immediate focus, Starship's capabilities will also enable operations on other worlds, he wrote. Thanks to advancements like in space propellant transfer, Starship will be capable of landing massive amounts of cargo on the moon. Once there, it will be possible to establish a permanent presence for scientific and manufacturing pursuits. Factories on the moon can take advantage of lunar resources to manufacture satellites and deploy them further into space, and from there, he said, Mars will be firmly on the horizon. The capabilities we unlock by making space based data centers a reality will fund and enable self growing bases on the moon, an entire civilization on Mars, and ultimately expansion to the universe, he wrote. That's the vision, at least end quote and quoting the times. By merging the companies, Mr. Musk provided a financial lifeline to Xai, which was founded later than AI Rivals and has spent billions of dollars to catch up. The unusual arrangement demonstrates how Mr. Musk, the world's richest man, increasingly thinks of his various businesses interconnected, even if there are no obvious overlaps. Last year he merged X with XAI to consolidate the company's data, compute power and workforces. Now he's taking an even bigger leap, merging the often troubled AI startup with SpaceX, the most successful private space company in the world. Ultimately, it's likely there will be one Musk Incorporated at the end, said Peter Diamandis, the founder of the Xprize Foundation, a nonprofit focused on fostering technological development. Mr. Diamandis, who is an investor in SpaceX and Xai, said he always believed Mr. Musk's vision was to merge his companies. If you've ever wanted to be a fly on the wall for the conversations world class CEOs have behind closed doors, then you may want to listen to the new podcast Long Strange CEO to CEO. In each episode, Brian Halligan, co founder of HubSpot, speaks with leaders to unpack the real stories behind scaling their from the emotional toll of leadership to the tactical decisions that shape a company's future, expect candid conversations about hiring, culture, communication strategy and more. Whether you're an aspiring founder, a seasoned CEO, or simply curious about the stories behind the CEOs on the long Strange trip of building enduring legendary companies. This is a show you won't want to miss. Long Strange Trip is available everywhere you get your podcasts. That's Long strange trip podcasts. OpenAI has launched a Codex app for macOS and says Codex usage has nearly doubled since mid December, quoting ZDNet this is different from the general purpose ChatGPT app that OpenAI has been shipping for a while. The new coding app is intended to be something of a command center, not only for directing coding agents, but also for managing multiple coding agents across projects and tasks that run for long periods of time. In a briefing I attended with OpenAI executives a few days before the launch, OpenAI co founder and CEO Sam Altman said there's obviously been a huge shift in software agents over the last few months as the models have crossed a threshold of real utility. 5.2 in particular is a model that many of us have found can do extremely complex things and we realized we started to feel limited by the interface. The new Mac app is intended to help mitigate that limitation. OpenAI described codecs as expanding from single agent coding operations to being at the core of multi agent software lifecycles. Rather than pairing with a developer on a single edit, OpenAI Codex sees programmers as coordinating teams of agents across all the design, build, ship and ongoing maintenance stages of work. The latest version of Codex GPT 5.2 Codex only launched in mid December, yet according to the company, Codex usage has nearly doubled since that time, with more than a million developers using it in the last month. In the briefing, Altman stated that GPT 5.2 Codex quote is the fastest adopted model that we have ever made. He also reported on an extreme level of momentum using this tool, with usage growing more than 20 times since last August. In addition to independent developers like me, the company reported that major customers include Cisco Ramp, Virgin Atlantic, Vanta, Duolingo and Gap. End quote. This sort of weird back and forth between OpenAI and Nvidia is continuing. We spoke about how Jensen Huang was maybe like I don't know if OpenAI's business is well run enough only then to quickly walk that back because OpenAI is still Nvidia's biggest customer. So I wonder if this is a bit of a shot back across the Nvidia bow sort of leak. Sources told Reuters that OpenAI has been unsatisfied with some of Nvidia's AI chips used for inference and has been seeking alternatives since at least last year, including from Cerebras and Grok 7. Sources said that OpenAI is not satisfied with the speed at which Nvidia's hardware can spit out answers to ChatGPT users for specific types of problems, such as software development and AI communicating with other software. It needs new hardware that would eventually provide about 10% of OpenAI's inference computing needs in the future, one of the sources told Reuters. The ChatGPT maker has discussed working with startups including Cerebras and Grok to provide chips for faster inference, two sources said. But Nvidia struck a $20 billion licensing deal with Grok that shut down OpenAI's talks, one of the sources told Reuters. Nvidia's decision to stop snap up Grok look like an effort to shore up a portfolio of technology to better compete in a rapidly changing AI industry, chip industry executives said. Nvidia, in a statement said that Grok's intellectual property was highly complementary to Nvidia's product roadmap. Nvidia's graphics processing chips are well suited for massive data crunching necessary to train large AI models like ChatGPT that have underpinned the explosive growth of AI globally to date. But AI advancements increasingly focus on using training models for inference and reasoning, which could be a new, bigger stage of AI, inspiring OpenAI's efforts. The ChatGPT maker's search for GPU alternatives since last year focused on companies building chips with large amounts of memory embedded in the same piece of silicon as the rest of the chip, called sram. Switching as much costly SRAM as possible onto each chip can offer speed advantages for chatbots and other AI systems as they crunch requests for millions of users. Inference requires more memory than training because the chip needs to spend relatively more time fetching data from memory than performing mathematical operations. Nvidia and AMD GPU GPU technology relies on external memory, which adds processing time and slows how quickly users can interact with a chatbot inside OpenAI. The issue became particularly visible in Codex, its products for creating computer code, which the company has been aggressively marketing, one of the sources added. OpenAI staff attributed some of Codex's weaknesses to Nvidia's GPU based hardware, one source said. In a January 30 call with reporters, Sam Altman said that customers using OpenAI's coding model models will put a big premium on speed for coding work. One way OpenAI will meet that demand is through its recent deal with Cerebras, Altman said, adding that speed is less of an imperative for casual ChatGPT users. Competing products such as Anthropic's Claude and Google's Gemini benefit from deployments that rely more heavily on the chips Google made in house called Tensor processing units, or TPUs, which are designed for the sort of calculations required for inference and can offer performance advantages over general purpose AI chips like the Nvidia design GPUs. In addition, oddly, Oracle tweeted the Nvidia OpenAI deal has zero impact on our financial relationship with OpenAI. We remain highly confident in OpenAI's ability to raise funds and meet its commitments. You should read into that commitments to us. But I'm pointing out if you, Oracle, are weighing in there saying that you're sure Nvidia is still going to invest in OpenAI, it kind of makes people think you're actually worried that's not gonna happen and all of that revenue you anticipated might not end up showing up. You do realize that, right? Finally today, quoting Bloomberg, Waymo Alphabet's autonomous driving unit raised $16 billion at a $126 billion valuation, a funding round that reflects its rapid, rapid ascent as a robotaxi pioneer. The financing was led by new investors Sequoia Capital, DST Global and Dragonier Investment Group, Waymo said in a statement Monday. The new valuation includes the money raised. Bloomberg News reported earlier that Alphabet would be contributing $13 billion to the investment. Waymo confirmed in Monday's announcement that its parent company is participating in the financing without giving exact terms. This infusion of capital will ensure we are positioned to move forward with unprecedented velocity while maintaining our industry leading safety standards, waymox, waymo co Chief Executive officers Tekedra Mawakana and Dmitry Dolgov said in a blog post. Our focus is now on global scale. Despite logging about 20 million rides in 2025, Waymo's scale remains modest, bloomberg intelligence analyst Mandeep Singh wrote in a January 31 note after Bloomberg's report on Waymo's fundraising effort. Yeah, but that's why I'm flagging this. That size of a raise, that much money can only mean one thing. Thing. Waymo is about to put the pedal to the metal in terms of scale. If you forgive the pedal to the metal analogy. I think people are continuing to underestimate the degree to which you're just gonna blink and one day suddenly you're gonna look up and self driving taxis are just a part of your everyday life. Arsenal game today. Everybody up the Gooners. Since I'm gonna be traveling tomorrow, you're going to get a bonus interview EP so I'll be back talking to you live on Thursday but you're gonna love the interview tomorrow with the founder of Ring.