BREAKING NEWS
After Anthropic announced their new partnership with SpaceX, CEO Elon Musk followed up by writing on X that xAI, home of Grok, will be dissolved and absorbed into the rocket company.
“xAI will be dissolved as a separate company, so it will just be SpaceXAI, the AI products from SpaceX,” Musk wrote Wednesday afternoon.
This shouldn’t come as much of a shock. SpaceX announced its acquisition of xAI on February 2, in an all-stock deal that valued xAI at roughly $250 billion. It also pissed off some SpaceX holders, who were forced to swallow dilution and take on a cash-hungry AI business. Which is probably why xAI got dissolved in the first place. Reuters reported that xAI burned $7.8 billion in cash in the first three quarters of 2025, which annualizes to about $10.4 billion. Not great. So the obvious fix was to strap xAI to SpaceX, rebrand it as the rocket company’s AI arm, and keep it alive off the halo of the coming IPO. In the end, early investors are happy because they still get their SpaceX shares, and all this can look like a hyped-up ketamine-fueled M&A fever dream.
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By a weird twist of irony, Anthropic is now paying SpaceXAI for compute. Anthropic said they will be using “all the compute capacity at their Colossus 1 data center,” giving them over “300 megawatts of additional capacity to deploy within the month.”
In other words, Anthropic, which Musk has constantly bad-mouthed on X, will be the exclusive tenant at Colossus 1, the original Memphis, Tennessee facility, just in time for xAI to be dissolved and for SpaceX to go public at the same time as a supposed rival.
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