Elon Musk is no stranger to self-dealing. Whether it was early cash support for Tesla from SpaceX or SolarCity powering Tesla’s Superchargers, he’s curated a multiverse of interconnected companies that he’s referred to as the Muskonomy. This week, we’re seeing the latest Russian nesting doll act in building the Muskonomy: SpaceX in talks to merge with xAI. Yet despite what may feel like another example of self-dealing, there is clearly rhyme to the reason behind the empire Musk is building. And it all comes back to compute.
SpaceX has proven it can manage a fleet of low-earth orbit assets with Starlink. xAI has proven it can build state-of-the art compute with the launch of Colossus in just 122 days and at ~10x the scale of a typical AWS data center. Compute limitations will push these hyperscaler empires towards creative playbooks. Musk’s latest big dream? Massive orbital data centers that “would likely rely on hundreds of solar‑powered satellites networked in orbit to handle enormous computing demands.” In response to AI’s insatiable hunger for compute, the Muskonomy’s answer seems to be the buildout of data centers in space.
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