Below is the reason he put Elon posted this 👇

Yes, it really happened. Officially. I’d imagine the signing ceremony went down as something like this:

I’ll just leave full Elon’s blog post from SpaceX for you here to explain where all this is heading.

“SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform. This marks not just the next chapter, but the next book in SpaceX and xAI's mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!

Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.

In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!

The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called “space” for a reason. 😂

By directly harnessing near-constant solar power with little operating or maintenance costs, these satellites will transform our ability to scale compute. It’s always sunny in space! Launching a constellation of a million satellites that operate as orbital data centers is a first step towards becoming a Kardashev II-level civilization, one that can harness the Sun’s full power, while supporting AI-driven applications for billions of people today and ensuring humanity’s multi-planetary future.

In the history of spaceflight, there has never been a vehicle capable of launching the megatons of mass that space-based data centers or permanent bases on the Moon and cities on Mars require. Even in 2025, the most prolific year in history in terms of the number of orbital launches, only about 3000 tons of payload was launched into orbit, primarily consisting of Starlink satellites carried by our Falcon rocket.

The requirement to launch thousands of satellites to orbit became a forcing function for the Falcon program, driving recursive improvements to reach the unprecedented flight rates necessary to make space-based internet a reality. This year, Starship will begin delivering the much more powerful V3 Starlink satellites to orbit, with each launch adding more than 20 times the capacity to the constellation as the current Falcon launches of the V2 Starlink satellites. Starship will also launch the next generation of direct-to-mobile satellites, which will deliver full cellular coverage everywhere on Earth.

While the need to launch these satellites will act as a similar forcing function to drive Starship improvements and launch rates, the sheer number of satellites that will be needed for space-based data centers will push Starship to even greater heights. With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year, enabling an exciting future where humanity is out exploring amongst the stars.

The basic math is that launching a million tons per year of satellites generating 100 kW of compute power per ton would add 100 gigawatts of AI compute capacity annually, with no ongoing operational or maintenance needs. Ultimately, there is a path to launching 1 TW/year from Earth.

My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space. This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.

This new constellation will build upon the well-established space sustainability design and operational strategies, including end-of-life disposal, that have proven successful for SpaceX’s existing broadband satellite systems.

While launching AI satellites from Earth is the immediate focus, Starship’s capabilities will also enable operations on other worlds. Thanks to advancements like in-space propellant transfer, Starship will be capable of landing massive amounts of cargo on the Moon. Once there, it will be possible to establish a permanent presence for scientific and manufacturing pursuits. Factories on the Moon can take advantage of lunar resources to manufacture satellites and deploy them further into space. By using an electromagnetic mass driver and lunar manufacturing, it is possible to put 500 to 1000 TW/year of AI satellites into deep space, meaningfully ascend the Kardashev scale and harness a non-trivial percentage of the Sun’s power.

The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe.

Thank you for everything you have done and will do for the light cone of consciousness.

Ad Astra!

Elon

Ad Astra!

If you read all the above, you know why this had to happen. Even if mainstream media is frantically trying to frame this merger as a bad thing, saying it’s meant to cover xAI’s debts and whatnot. Anyone closely watching knows that xAI is one of the core frontier AI models today, battling at the very top with OpenAI and Claude.

The valuations in this merger were (reportedly) set as $250B for xAI, and $1.25T on the combined entity. A newly updated business filing in Nevada lists the business name as K2 MERGER SUB 2.

Per a leaked email through WSJ, as part of the xAI-SpaceX deal, the xAI shares will be converted into 0.1433 shares of SpaceX stock, and employees will have the option to cash out.

K2 here means a Kardashev Type 2 civilization.

So, what does it mean for the other, rumored potential Tesla <> SpaceX merger?

We’re not sure.

Some say that this won’t happen.

Others say this is the exact perfect move to create conditions for a Tesla merger, too.

Shareholders (well, most of them) would certainly love the idea, even if it comes with some dilution. It won’t be as easy of a merger, however, since Elon owns less of Tesla as he does of xAI or SpaceX, and it’s a public company.

In one of the previous newsletters, I asked whether you’d buy shares in a SpaceX IPO.
70.4% of you answered that you would “Certainly buy some shares”; 22.4% said maybe and 7.2% would not buy any shares.

Given that we have north of a thousand of you holding TSLA shares, you are now by default also investors in SpaceX → because as I wrote in our last newsletter, Tesla announced it invested $2B in xAI’s Series E funding round earlier in January. This means that Tesla is now a minor shareholder in SpaceX (due to xAI now being a part of it), and so are all of you who own Tesla shares.

Congrats.

We’ll now certainly look whether Tesla will join this convergence of Elon’s companies, or remain independent. After all, Elon did say this late last year:

Meanwhile, taking all of Elon’s companies now, they have a combined valuation of $2.6 trillion.

The good thing coming out of all this is certainly the memes. Here’s one:

I also seemed to play a prophet and posted this on X about 5 hours before the merger announcement:

Fun times ahead. I’ll certainly add to my resume that I have received a paycheck from SpaceX. I mean the $70 bucks or so they paid me through the creator program there.

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Tesla released its new residential solar cell.
Here's unboxing video by one of the installers.

Solar Panel is now 420W (of course) and “uses same cascading cell technology as our Solar Roof cells to create 18 power zones (3x more than conventional panels). This reduces energy loss in shaded conditions & produces more energy.”

Panel Mount:
– 33% faster installation by using a groove-based frame system for streamlined assembly (eliminating traditional rails & clamps)
– Up to 15% fewer roof penetrations while preserving structural integrity & lowering costs
– Low-profile finish that is universally compatible with shingle, tile, metal & flat roofs

Now, this is important to note — we’re not talking about the Solar Roof here. It’s solar panels.

Tesla announced it is scaling up its Giga New York factory to an initial solar module capacity of 300MW per year. Tesla has historically relied on third-party solar panels, but now the company is assembling them in-house in the United States.

Now comes the scale bit:

Tesla is looking to deploy 100GW of solar manufacturing from raw materials on America soil before the end of 2028, according to new Tesla job listings.

100GW of solar is enough to power roughly 20 million homes.

Elon said, at the World Economic Forum recently: "The SpaceX and Tesla teams are both separately working to build to 100GW of manufactured solar power in the U.S. That will probably take us about 3 years." The WEF full interview is here.

Elon also said on Tesla's Q4 earnings call:

I've been saying this for a long while now that Elon's next business will be building solar at scale… looks like we’re here!

While we’re at the integration and everything, it looks like a 100GW/year Tesla Terafab is coming, as Elon writes: "100GW/year of solar-powered AI satellites requires 100GW/year of AI computers..."

This comes as the news that you naturally already know about the SEC filing from SpaceX for orbital data centers that has 1 million satellites written in it, even mentions Kardashev II scale:

In Chile, Tesla made a deal with utility company Copec to jointly build Superchargers every 200km on the country’s highways.

As part of the project, Tesla Superchargers will be installed at Copec filling stations at intervals of 200 kilometres. One such corridor will connect the cities of La Serena and Puerto Montt, which are approximately 1,500 kilometres apart.

Each location will feature four charging points with a capacity of up to 250 kW (so, it’ll be V3 it seems), powered by renewable energy from Copec Emoac. While not explicitly confirmed, these are likely Superchargers from the white-label programme for third-party customers we’ve reported about here before.

xAI launched Grok Imagine 1.0, with 10-second videos; 720p resolution and a lot better audio.

xAI provides generators for Tennesseans for help to those without power, soon providing Tesla Powerwalls too.

Just interesting: Starlink capped the speed of non-Ukraine-registered Starlinks in Ukraine territory at 75km/h, so Russians couldn’t use Starlink on their drones to attack. Elon says: "Looks like the steps we took to stop the unauthorized use of Starlink by Russia have worked. Let us know if more needs to be done."

Also, SpaceX has developed a novel Space Situational Awareness (SSA) system, called Stargaze → starlink.com/stargaze "To maximize safety for all satellites in space, SpaceX will be making Stargaze conjunction data available to all operators, free of charge."

It seems a Starlink phone isn't out of a question, as Elon says: "Not out of the question at some point. It would be a very different device than current phones. Optimized purely for running max performance/watt neural nets."

Neuralink, per its latest video and article “Two years of Telepathy” has now successfully implanted its "Telepathy" brain chip into 21 humans, up from 9 humans six months ago.

DJ Seo, a cofounder of Neuralink, says:

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