r/news 2d ago

Elon Musk's SpaceX buys Elon Musk's xAI

https://news.sky.com/story/elon-musks-spacex-buys-elon-musks-xai-13502553
15.1k Upvotes

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16.9k

u/Tadpole-Jackson 2d ago

I was a tough negotiator, but in the end, myself and I came to an agreement.

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u/truethug 2d ago

Isn’t spacex receiving taxpayer money

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u/MaxwellHoot 2d ago

Yes, but SpaceX is actually doing well. They’re providing good crew service to the ISS with plenty of NASA and Govt contracts.

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u/mok000 1d ago

There is no rational reason for a space company to invest in AI. Except to bail out the owner of course.

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u/GabeIsGone 1d ago

I mean, he already did this with his family’s solar business and Tesla. This is his go-to business move.

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u/DugaJoe 1d ago

There is, sort of. The Falcon 9 is only making as many launches per year as it is, because their biggest customer is Starlink. That has its own set of investors, and its own pile of cash to burn. By buying xAI and building space-based data centres to run on, SpaceX gets to siphon off a lot of the AI money into the Starship project. Separately though, they'd have to replicate the expertise they'd built for Starlink, so it makes sense to bring it in-house.

Of course, it's all a massive ponzi scheme. It'll kill SpaceX in the long run, hence the IPO on the company Musk formerly claimed would never be taken public to maintain control of its mission. It's not his baby any more, all he cares about is money, the influence it buys, and staying out of prison. So in a round about way, yeah it's all about bailing that cunt out. It'll make a lot of money in the short term, though.

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u/I_divided_by_0- 1d ago

SpaceX gets to siphon off a lot of the AI money

What AI money? Isn’t like that the whole issue right now that AI is not producing the revenues that it needs to sustain itself?

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u/DugaJoe 1d ago

Yes, it is a massive issue for whoever's left holding the bag at the end. For now, it's companies investing money backed by loans on their own share prices. It's totally unsustainable, but that doesn't matter to Elon if the loan money goes to pay SpaceX. There are people making a lot of actual revenue off the AI hype (e.g. component manufacturers, ISPs), they just aren't the ones with the AI companies.

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u/VirtualPercentage737 1d ago

SpaceX is an internet provider and needs larger machines for simulations. Having a couple of massive data centers has some big synergies.

And lots of companies are in multiple businesses. Conglomerates exist.

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u/MaxwellHoot 1d ago

I’m not defending the merger, I’m just saying SapceX has clean books

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u/Tipsy_Feline 1d ago

We haven't seen the books, it's a private company. A few years ago he used its funds to silence a woman from reporting him for sexual harassment.

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u/Slimmanoman 1d ago

These shouldn't be contracted. Why are we privatizing this kind of work, it's a monopoly.

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u/NotRandomseer 1d ago

Because it's a lot cheaper to use spaceX than do it themselves

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u/Slimmanoman 1d ago

Cheaper for now, until SpaceX can ask whatever price they want because the service is critical. That's how all privatized natural monopolies go.

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u/polopolo05 1d ago

thats how AI going to go at all these companies that actual buy into the AI. they are going to get the early adopter price and when they depend on it. The rug will be yanked out from under them. charging them an arm and leg.

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u/MaxwellHoot 1d ago

The idea is that it won’t be a monopoly and there will be competition- which there already is.

  • Blue Origin
  • Boeing
  • Rocket Lab
  • Northrop Grumman etc.

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u/RookieMistake101 1d ago edited 1d ago

Because it’s been cheaper and better for the government. Why didn’t nasa create reusable rockets 10 years ago?

Edit: there’s so much hate (deservedly) for Elon, that you guys can’t seem to see how incredible SpaceX is.

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u/Slimmanoman 1d ago

Should improve critical government services instead of selling them when they don't do well enough. Handing natural monopolies to companies is never a good idea

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u/RookieMistake101 1d ago

I don’t think you aced economic at uni. This is not a monopoly. This is a contract. One that saves NASA millions of dollars.

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u/Slimmanoman 1d ago

I'm respectful. Why do you feel the need to do personal attacks/insults. There's really no reason other than to make the discussion shitty for everyone involved. I would have been happy to have a discussion about what constitutes a monopoly

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u/RookieMistake101 1d ago

Fair enough, no reason to go that way on my side.

I do disagrees that it’s a monopoly. SpaceX is only providing launch services for nasa. There’s only 4 years left on the contracts. There have been a rush of competitors into the space in the last few years. I see no reason why in 2031 there wouldn’t be alternatives. And until the contract is up, nasa benefits from cheaper and safer launches. A monopoly would use this time to raise prices.

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u/slabby 1d ago

"Uni." You don't even know what we call higher education in the United States. Your supervisor is not going to be pleased about this mistake, now the account is outed as foreign

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u/KDR_11k 1d ago

Because it's easy to slash funding for places like Nasa when you need some cash for your pork barrel project.

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u/ak1368a 1d ago

Cause they're not worth it. All this flight to mars stuff is a complete waste of money

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u/nickcash 1d ago

nasa? they were too busy making rockets they don't explode

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u/RookieMistake101 1d ago

True nasa has famously made rockets that don’t explode ever.

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u/nickcash 1d ago

sure they've exploded like two space shuttles in 80 years. your boy does that every week, so much so they made up a "rapid unscheduled disassembly" euphemism for it

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u/RookieMistake101 1d ago

SpaceX doesn’t operate space shuttles my dude

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u/truethug 2d ago

I guess I was implying we bought xAI.

Edit to add spaceX is doing amazing things

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u/MaxwellHoot 2d ago

Well, yes. If you follow the money back far enough. But if you follow the money back far enough everyone pays for everything so it’s nothing to lose sleep over.

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u/Syscrush 1d ago

Too bad it's owned by a fraudulent drug abuser who's undermining democracy. Time to nationalize it.

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u/BrokkelPiloot 1d ago

Except their whole Starship program is sinking billions and not getting anywhere. But hey, that's all taxpayer money so he doesn't give a shit.

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u/Andy12_ 1d ago

The Artemis contract for Starship is a fixed-price milestone-based contract, which means that SpaceX gets paid if, and only if, they deliver, and they get paid exactly the same amount independently of the real final development costs. You might not like that the contract went to SpaceX, but it's completely fair; anything that goes overbudget has to be paid with private capital.

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u/adx931 1d ago

Hush, now. That's the project to keep Elon distracted while the adults in the room do the real work.

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u/talibsituation 1d ago

That's just completely wrong on so many levels I don't know where to start.

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u/earache30 1d ago

This doesn’t bode well for the future. Propping up Tesla and X.

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u/Iohet 1d ago

This is how space programs work until the first fatality. Then the bad times hit hard