SpaceX Acquires xAI in Ambitious Move to Build Space-Based Data Centers
SpaceX, led by Elon Musk, acquired xAI, Musk's artificial intelligence startup, on Monday, creating what the company claims is the world's most valuable private entity, according to a memo posted on the rocket company's website. The merger is driven by a plan to construct data centers in space, an idea Musk has been advocating for several months, TechCrunch reported.
Musk stated that current AI advancements rely on large terrestrial data centers, which require significant power and cooling. He added that global electricity demand for AI cannot be met with terrestrial solutions in the near term without negatively impacting communities and the environment. xAI has faced accusations of imposing hardship on communities near its data centers in Memphis, Tennessee, according to TechCrunch.
The Verge reported that the merger aims to create a vertically integrated innovation engine encompassing AI, rockets, space-based internet, direct-to-mobile device communications, and a real-time information and free speech platform. Musk described the merger as marking "not just the next chapter, but the next book."
However, the merger faces potential risks. The Verge reported that the recent release of documents related to Jeffrey Epstein, including revelations that Musk sought an invitation to Epstein's island, could derail plans to take the combined company public. Experts suggest these revelations add risk to the merger.
In other tech news, Adobe announced on Monday that it would discontinue its 2D animation software, Adobe Animate, on March 1, 2026, as the company increases its investments in AI, TechCrunch reported. Enterprise customers will receive technical support until March 1, 2029, while other customers will have support through March of next year. The decision has been met with disappointment and concern among Adobe Animate users, who fear a lack of suitable alternatives.
Meanwhile, two Stanford students, Roman Scott and Itbaan Nafi, launched a $2 million startup accelerator called Breakthrough Ventures, aimed at funding businesses founded by college students and recent graduates nationwide, TechCrunch reported. Nafi stated that the fundraise transforms Breakthrough from a seasonal accelerator into a lifelong partnership with its founders. Raihan Ahmed was tapped to lead the accelerator early last year.
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