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The SpaceX xAI Merger Is A Giant Red Flag
No matter how you look at this, it is bad news.
As part of an all-stock merger, SpaceX and xAI have combined into a single giant “vertically integrated innovation engine” — whatever that means. You might think these companies have very little in common, but the justification behind their merger is that SpaceX will build and launch orbital data centres that xAI models will use. Indeed, SpaceX recently applied to launch a million data centre satellites! But this narrative simply doesn’t align with reality. In fact, many consider this a bailout of xAI, given that the company’s losses are mounting and this merger allows xAI to piggyback on SpaceX’s upcoming, highly anticipated IPO. It isn’t like such a move is unprecedented; after all, xAI effectively bailed out X/Twitter in March of last year in a Musk-led merger. But, here is the interesting part: this merger might not be a bailout of xAI but a bailout of SpaceX instead. Furthermore, recent revelations suggest Musk will use this merger to take a worryingly gargantuan leap towards anarcho-capitalism. So, let’s break this down.
xAI
It is true that xAI, like every LLM company out there, is in serious need of cash, which this merger can provide. Bloomberg recently obtained documents showing that xAI’s net losses are growing rapidly, with the…
