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Elon Musk’s SpaceX officially acquires Elon Musk’s xAI, with plan to build data centers in space

SpaceX has acquired Elon Musk’s artificial intelligence startup, xAI, creating the world’s most valuable private company, the spaceflight company announced Monday.

Musk, who is also the CEO of SpaceX, wrote in a memo posted to the rocket company’s website that the merger is largely about creating space-based data centers — an idea he has become fixated on over the last few months.

“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,” he wrote. (xAI has been accused of imposing some of that hardship on the communities near its data centers in Memphis, Tennessee.)

The tie-up values the combined company at $1.25 trillion, according to Bloomberg News, which was first to report the completed deal. SpaceX has been reportedly preparing an IPO for as early as June of this year. It’s unclear whether the merger will affect that timeline. Musk did not address the IPO in his public memo.

The merger brings together two of Musk’s companies, each with its own financial challenges. xAI is currently burning around $1 billion per month, according to Bloomberg. SpaceX, meanwhile, generates as much as 80% of its revenue from launching its own Starlink satellites, according to Reuters. Last year, xAI acquired X, the social media company also owned by Musk, with Musk claiming a combined company valuation of $113 billion.

Musk wrote in his memo that it will take a constant stream of many — although he did not specify how many — satellites to create these space-based data centers, ensuring that SpaceX will have an even-larger constant stream of revenue for the foreseeable future. (That revenue loop likely looks even more attractive when you consider that satellites are required to be de-orbited every five years by the Federal Communications Commission.)

While space data centers may be the stated goal, SpaceX and xAI have very different near-term objectives.

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SpaceX is currently trying to prove that its Starship rocket is capable of bringing astronauts to the moon and Mars, while xAI is competing with leading artificial intelligence companies like Google and OpenAI. The pressure on xAI is so great, the Washington Post reported Monday, that Musk loosened restrictions on the company’s chatbot Grok — which contributed to it becoming a tool for making AI-generated nonconsensual sexual imagery of adults and children.

Musk is also the head of Tesla, The Boring Company, and Neuralink. Tesla and SpaceX previously invested $2 billion each in xAI.

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Bluesky leans into AI with Attie, an app for building custom feeds

The team from Bluesky has built another app — and this time, it’s not a social network, but an AI assistant that allows you to design your own algorithm, create custom feeds, and, one day, vibe-code your own app.

At the Atmosphere conference over the weekend, Bluesky’s former CEO, Jay Graber, now chief innovation officer, and Bluesky CTO Paul Frazee, presented the AI app, called Attie, for the first time. Conference attendees will become the initial beta testers for the new experience, which leverages Anthropic’s Claude under the hood to create an agentic social app built on Bluesky’s underlying protocol, the AT Protocol (or atproto for short).

“It’s a new product — it’s not a part of the Bluesky app,” explains interim CEO Toni Schneider in an interview. (In addition to his CEO role, Schneider is a partner at Bluesky backer True Ventures.) “We’ve launched a lot of things inside Bluesky — Starter Packs and custom feeds, and all those kinds of things. This is a standalone product, and it’s the first one that’s built by Jay’s new team.”

ScreenshotImage Credits:Attie from Bluesky

With Attie, anyone will be able to build their own custom feed just by typing in commands in natural language, the same as if they’re chatting with any other AI chatbot. To use the app, people will sign in with their Atmosphere login (meaning their login for any app that runs on atproto, which includes Bluesky). Attie will immediately understand what you’ve been talking about, what sort of things you like, and more, because Bluesky and the wider ecosystem are open systems that share data across apps.

You can ask Attie questions, like what posts you might like to see or repost, and you can use the app to curate your own custom feed, personalized to you.

“You control it, you shape it, without having to write code or know how to set up these feeds,” Schneider says. “It’s the beginning of just having a lot more people be able to build on top of the Atmosphere.”

Plus, he adds, “It is an AI product, but it’s an AI product that’s very people-focused … We think AI is a very powerful technology, but we want to make sure that we use it to build things that really benefit people.”

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At launch, Attie can be used to build and view these feeds, which will later become available to you within Bluesky or any other atproto app. Over time, the plan is to allow Attie’s users to vibe-code their own social apps as well as build tools for other people.

ScreenshotImage Credits:Attie from Bluesky

Schneider says that Graber and her team began working on the app a few months ago, which was around the same time she decided to return to building, instead of running the company.

“I think she realized that there was so much more that she wanted to build, and just doing the CEO job kept her busy, and she felt like she wanted more time,” Schneider tells TechCrunch. “As she spent more time, [and] got freed up, I think it became clear that this is her happy place. She’s an amazing leader and visionary, and we want her building more things and not worrying about operating the company,” he says.

Graber says today, AI is being used by the major platforms to serve themselves, not their users, by trying to increase people’s time spent in their apps, harvesting data, and controlling their algorithms.

“We think AI should serve people, not platforms,” Graber said in her announcement of Attie. “An open protocol puts this power directly in users’ hands. You can use it to build your own feeds, create software that works the way you want it to, and find signal in the noise.”

Graber’s decision to once again focus on protocol and product was followed by the company’s announcement that it now has $100 million in additional funding from a round that closed last year. The team hopes that news serves as a signal to the wider community that Bluesky will continue to be around.

“It means we have three-plus years of runway, which is great. That means stability and security for the rest of the ecosystem,” Schneider tells TechCrunch. It also means that Bluesky’s team has time to tackle the bigger challenges ahead, which include adding privacy controls to the protocol and finding a way to monetize the social network of 43.4 million users.

One thing that Schneider assures us is not in the works, however, is any crypto integration — despite the financial backing from multiple crypto investors. That’s something that had worried some Bluesky users, who feared the app would be filled with crypto scams or become a payment tool.

“It’s the kind of investors who were attracted to crypto because of its decentralization, and they were investing in things built on the blockchain that were super decentralized,” Schneider says of Bluesky’s backers in the crypto space. “This is decentralized social, so it fits those who are invested to believe in the platform and the ecosystem opportunity.”

Instead, the company may experiment with other means of monetization. The team hasn’t yet decided if Attie will ultimately require a fee, as it’s only a private beta for the time being. Other ideas being batted around include subscriptions and hosting services for those who want to host their own communities on the protocol.

Schneider, the former CEO of Automattic, the home of publishing platform WordPress.com, sees the potential for the Atmosphere as being similar to WordPress in this way.

“At the center of [the Atmosphere] is a completely open system, so anybody can participate,” he says. “You can have all of these independent, decentralized pieces that work together. With WordPress, that turned into a huge ecosystem with billions of dollars — over $10 billion a year, now — flowing through it.”

Schneider continues, “So it’s gotten very big, even though it’s completely decentralized. And this is what we’re hoping for, for the Atmosphere to have that similar ability for lots of these apps and services to coexist and work together and build an ecosystem.”

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David Sacks is done as AI czar — here’s what he’s doing instead

David Sacks has used up his days as Donald Trump’s AI and crypto czar.

Speaking with Bloomberg on Thursday, the longtime entrepreneur, investor, and podcaster confirmed that his non-consecutive 130-day stint as a special government employee is over and that he’s moving on to co-chair the President’s Council of Advisors on Science and Technology (PCAST) alongside senior White House technology adviser Michael Kratsios. 

“I think moving forward as co-chair of PCAST, I can now make recommendations on not just AI but an expanded range of technology topics,” he told Bloomberg via a video interview. “So yes, this is how I’ll be involved moving forward.”

What that means in practice is Sacks will be much further from the power center in Washington than since the outset of this second Trump administration. As AI czar, Sacks had a direct line to Trump and a hand in shaping policy. PCAST is a federal advisory body, so while it studies issues, produces reports, and sends recommendations up the chain, it doesn’t make policy.

The council has existed in some form since FDR, though Sacks made a point to Bloomberg of noting that this particular iteration has “the most star power of any group like this” ever assembled, and it’s hard to argue he’s wrong. The initial 15 members include Nvidia’s Jensen Huang, Meta’s Mark Zuckerberg, Oracle’s Larry Ellison, Google co-founder Sergey Brin, Marc Andreessen, AMD’s Lisa Su, and Michael Dell, among others. (That’s a lot of billionaires.)

Sacks told Bloomberg the council will take up AI, advanced semiconductors, quantum computing, and nuclear power, and that near-term attention will go toward pushing Trump’s national AI framework, released just last week. The framework is aimed at replacing what Sacks described to Bloomberg as a mess of conflicting state-level rules. “You’ve got 50 different states regulating this in 50 different ways,” he said, “and it’s creating a patchwork of regulation that’s difficult for our innovators to comply with.” 

What Sacks didn’t address head-on was why the transition is happening now and whether his recent comments were a factor. Earlier this month, on the popular “All In” podcast that he co-hosts, Sacks publicly urged the administration to find an exit from the U.S.-backed war with Iran, walking through a set of worsening scenarios — attacks on oil infrastructure in neighboring countries, the destruction of desalination plants, the possibility of nuclear use by Israel — and calling for a polite way out. Trump responded by telling reporters that Sacks hadn’t spoken to him about the war. (The U.S.-Israel war on Iran has now been going on for approximately 27 days.)

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Asked about the podcast episode on Thursday by Bloomberg, Sacks figuratively threw his hands in the air: “I’m not on the foreign policy team or the national security team,” he said, adding that his podcast comments represented his personal view, not an official one.

For all the marquee names Sacks is bringing to PCAST, it’s worth reflecting on what the council has historically been, which is an advisory body with some influence in some administrations and almost none in others. 

President Obama’s version was seemingly the most productive on record, churning out 36 reports over eight years — two of which led to concrete policy changes, including an FDA rule that opened the market for over-the-counter hearing aids. 

President Trump’s first-term council, by contrast, took nearly three years just to name its first members, produced a handful of reports, and made no particular mark, while President Biden’s council skewed heavily academic — Nobel laureates, MacArthur fellows, National Academy members — and issued a modest number of reports before the administration ended. 

The current PCAST is a completely different animal, built almost entirely from the executive suites of the companies shaping the technology it will advise on.

Now, Sacks is again one of those unencumbered executives, free to resume his life as an investor and entrepreneur. A spokesperson for Craft Ventures, the firm Sacks co-founded and where he remains a partner, has not yet responded to related questions about next steps; TechCrunch reported last year on the ethics waivers Sacks obtained to maintain financial stakes in AI and crypto companies while shaping federal policy in both areas — an arrangement that drew sharp criticism from ethics experts and lawmakers.

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OpenAI shuts down Sora while Meta gets shut out in court

When an 82-year-old Kentucky woman was offered $26 million from an AI company that wanted to build a data center on her land, she said no. Sure, that same company can try to rezone 2,000 acres nearby anyway, but as AI infrastructure stretches further into the real world, the real world is starting to push back. 

That tension is everywhere this week, from OpenAI shutting down its Sora app to courts finally starting to hold social platforms like Meta accountable. On this episode of TechCrunch’s Equity podcast, Kirsten Korosec, Anthony Ha, and Sean O’Kane dig into what it looks like when the AI hype cycle meets reality. 

Subscribe to Equity on YouTube, Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. 


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