According to a report by The Wall Street Journal, SpaceX plans to invest $2 billion in xAI, Elon Musk’s AI startup.
This potential investment would be SpaceX’s first in xAI. It would also rank among the largest cross-company deals within Musk’s portfolio.
The funding would be part of a larger $10 billion raise, $5 billion in equity and $5 billion in debt, managed by Morgan Stanley.
Why?
At first glance, a space exploration company funding an AI firm may seem unusual.
However, SpaceX already uses xAI’s technology. Grok, xAI’s chatbot, currently supports Starlink’s customer service operations.
This collaboration is expected to grow; SpaceX may soon adopt more AI tools to enhance operations.
These tools could assist with technical support, satellite management, and flight diagnostics.
This investment suggests that Musk sees AI not as a side project, but as a core component of future aerospace systems.
Grok’s Controversies
xAI has faced criticism in recent months. Grok, the company’s chatbot, came under fire for generating antisemitic content.
In one instance, it described itself as “MechaHitler.” The backlash was swift, and xAI later issued a public apology.
Yet despite the list of disruptive behaviors, Grok continues to expand its applications. Tesla now plans to integrate Grok into its vehicles as an in-car assistant.
Musk has not commented extensively on the issue. However, his actions suggest that he remains confident in Grok’s long-term potential.
Merging Tech and Strategy
Elon Musk frequently merges strategy across his businesses. Earlier this year, he integrated xAI into X (formerly Twitter).
That merger allowed xAI to access a large pool of user data and a direct communication platform.
Tesla is also moving toward greater AI adoption. Grok’s presence in Tesla vehicles could streamline user queries and voice commands.
This pattern reveals that Musk is consolidating technologies to increase efficiency, lower costs, and drive innovation from within.
SpaceX’s Benefit
The benefits for SpaceX extend beyond customer service. With stronger AI tools, the company could improve internal logistics and satellite coordination.
AI models may help in real-time decision-making during rocket launches. They could also reduce operational errors and improve system monitoring.
For Starlink, advanced AI could personalize user experiences, streamline troubleshooting, and increase service reliability.
This partnership creates an integrated loop. xAI provides the intelligence, SpaceX provides the infrastructure, and both grow stronger together.
