Tech Brew Ride Home - SpaceX Acquires xAI

Episode Date: February 3, 2026

As SpaceX acquires xAI, all of Elon’s companies under one umbrella is pretty much an inevitability isn’t it? What is with this weird game of chicken that Nvidia and OpenAI and now Oracle are all engaging in all of the sudden. And self-driving cars are about to be ubiquitous, indication number 37. Musk’s SpaceX Combines With xAI at $1.25 Trillion Valuation (Bloomberg) SpaceX acquires xAI, plans to launch a massive satellite constellation to power it (ArsTechnica) OpenAI's Codex just got its own Mac app - and anyone can try it for free now (ZDNet) Exclusive: OpenAI is unsatisfied with some Nvidia chips and looking for alternatives, sources say (Reuters) Waymo Raises $16 Billion From Alphabet and Others to Expand (Bloomberg) Learn more about your ad choices. Visit megaphone.fm/adchoices

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Google Fi Wireless is not subject to data traffic deprioritization during times of high network usage. Welcome to the TechBrewrite home for Tuesday, February 3rd, 26. I'm Brian McCullough today. As SpaceX acquires XAI, all of Elon's companies under one umbrella is pretty much an inevitability now, isn't it? What is it with this weird game of chicken that Nvidia and OpenAI and now Oracle are all engaging in all of the sudden? And self-driving cars are about to be ubiquitous indication number 37. Here's what you miss today in the world of tech. attackers don't need exploits when they use your allowed tools against you. That's why Threat Locker enforces default deny at execution, stopping unknown software scripts and ransomware the moment it tries to run. No signatures, no guesswork, just control. Threat Locker takes zero trust from theory to practice by blocking any unauthorized application or behavior from ever running in the first place. Generative AI has lowered the barrier to malware creation, so Threat Locker prevents AI-generated polymorphic and fileless attacks by shutting down unknown behavior, even if it's never been seen in the wild.

Threat Locker gives you tight control without the noise, meaning fewer alerts and a cleaner, predictable operational posture. Learn more at Threatlocker.com slash tech brew ride home. That's Threatlocker.com slash tech brew ride home. SpaceX has acquired XAI. Sources say the deal is all in stock and values the company at $1.25 trillion, with SpaceX valued as $1 trillion worth of that, and XAI, $250 billion worth of that.

Quoting Bloomberg. SpaceX said it acquired X-AI to, quote, 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, end quote. The company is still expecting to hold an initial public offering later this year. One of the people said SpaceX had been planning an IPO that could raise as much as 50 billion in what would be the biggest initial share sale to date. The combined firm's shares are

expected to be worth $526.59 each, according to some of the people who asked not to be identified as the information isn't public. The deal is all stock, one of the people said, end quote. Quoting Ars Technica. The merging of what is arguably Elon Musk's most successful company, SpaceX, with the more speculative XAI venture, is a risk. Founded in 2023, XAI's main products are the generative AI chatbot GROC and the social media site X, formerly known as Twitter. The company aims to compete with OpenAI and other artificial intelligence firms. There can be no question that the merger of SpaceX, the world's premier spaceflight company and the artificial intelligence firm offer potential strategic advances.

Musk strongly believes that artificial intelligence is central to humanity's future and wants to be among those leading in its development. With this merger, he plans to use SpaceX's deep expertise in rapid launch and satellite manufacturing and management to deploy a constellation of up to 1 million orbital data centers. This will provide the backbone of computing power needed to support XAI's operations. Musk's plan for the merge companies is predicated on several assumptions, including that AI is not a bubble, but rather a technology that will be fully embraced in the future. That orbital data centers are cost competitive compared to ground-based data centers, and

that compute is the essential roadblock that must be solved for widespread adoption of AI by society. If these assumptions are true, the merged SpaceXX-XAI company holds a powerful position. It could potentially own a full stack of capabilities from launch to orbital bandwidth to frontier AI models with Starlink Internet. It could provide AI on demand anywhere in the world to any mobile device. SpaceX already has the world's workhorse reusable rocket with the Falcon 9. It can presently deliver about 20 tons to low Earth orbit for an initial cost of $15 million, compared to more than four or five times that on the open market. Moreover, SpaceX is working toward fully reusable super heavy lift rockets with its starship vehicle.

The privately held company also operates more satellites about 9,600 than any other country or company in the world by a factor of 10. It has extensive operations not just in deploying, but also in operating this constellation over the last decade. This is not a simple capability. I would say there have been as many engineering advancements in orbital safety and collision prevention in the last 10 years as there have been advances in rocketry and that may have gone unnoticed, said Brian Whedon, Director of Civil and Commercial Policy at the Aerospace Corporation in an interview. In an email to SpaceX employees on Monday, Musk said Starship will begin launching V3 Starlink satellites into orbit this year, as well as the next generation of direct-to-mobile satellites. The launches, he said, will be a forcing function to improve the performance of Starship,

making it more rapidly reusable for data center deployment. The sheer number of satellites that will be needed for space-based data centers will push Starship to even greater heights, Musk wrote. 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 among the stars. Musk told employees that launching 1 million tons per year of satellites generating 100 kilowatts of compute power per ton would add 100 gigawatts of AI compute capacity annually, quote, with no ongoing operational or maintenance needs.

Ultimately, Musk believes there is a path to launching one terawatt per year from Earth. My estimate is that within two to three years, the lowest cost way to generate AI compute will be in space, Musk wrote. 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. Musk is clearly bullish on the future of AI and on space's potential to address the voracious power needs of AI data centers. Many people in the AI industry speculate that artificial intelligence is likely to go through serious and sustained growing pains or doubt that space-based data centers can, compete with operations built on the ground. But Musk, more than anyone, has the means to press forward the bull case for space-based AI, and he is going for it. Monday's merger follows an ultra-ambitious filing on Friday with the Federal Communications Commission in which SpaceX sought

permission to launch 1 million satellites that will operate as orbital data centers. The company said it would deploy the satellites to orbits with an altitude between 500 and 2,000 kilometers at 30 degree and sun synchronous inclinations. SpaceX also recently announced its plans to deploy a space situational awareness system called Stargays that will use star trackers to provide data to potential conjunctions between satellites and orbit. The goal is to help deconflict satellite trajectories and avoid collisions in low-earth orbit. This is all happening really fast, said Victoria Samson, chief director of space security and stability for Secure World Foundation in an interview? Samson said that at present, satellites have a fairly large bubble of space around them

when it comes to collision detection. This is because of uncertainties in the precise location and movement of vehicles. If you improve space situational awareness, such as what SpaceX seeks to do with stargaze, those bubbles could be shrunk to reduce the number of potential collision warnings, but that will come with risks. There's a lot of room in space, of course, Samson said, but the question is, how much risk do you want to take? One of the many questions raised by the new merger is whether SpaceX has lost its way. Musk founded the company in 2002 with the singular purpose of settling Mars, an audacious, if not impossible, goal at the time. In the decades since, SpaceX has made credible progress toward Mars, and with Starship, Humanity has for the first time

a transportation system potentially capable of landing humans on the red planet. But acquiring an AI company and putting so much effort into orbital data centers, is this consistent with the Mars mission? Musk clearly thinks it is. While launching AI satellites from Earth is the immediate focus, Starship's capabilities will also enable operations on other worlds, he wrote. 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. And from there, he said, Mars will be firmly on the horizon. 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, he wrote. That's the vision at least, end quote. And quoting the times. By merging the companies, Mr. Musk provided a financial lifeline to XAI, which was founded later than AI rivals and

has spent billions of dollars to catch up. The unusual arrangement demonstrates how Mr. Musk, the world's richest man, increasingly thinks of his various businesses as interconnected, even if there are no obvious overlaps. Last year, he merged X with XAI to consolidate the company's data, compute power, and workforces. Now he's taking an even bigger leap, merging the often-troubled AI startup with SpaceX, the most successful private space company in the world. Ultimately, it's likely there will be one Musk incorporated at the end, said Peter Diamandis,

the founder of the XPRIZ Foundation, a nonprofit focused on. on fostering technological development. Mr. Diamandis, who is an investor in SpaceX and XAI, said he always believed Mr. Musk's vision was to merge his companies, end quote. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the Unreal College deal, everything you need, to study and play with select Windows 11 PCs.

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See you this summer. Ambition comes in all shapes and sizes. At First Citizens Bank, we roll with your goals because we're built for what you're building. Fit for your ambition for Citizens Bank. OpenAI has launched a Codex app for MacOS and says Codex usage has nearly doubled since mid-December. quoting ZDNet. This is different from the general purpose chat GPT app that OpenAI has been shipping for a while. The new coding app is intended to be something of a command center, not only for directing coding agents, but also for managing multiple coding agents across projects and tasks that run for long

periods of time. In a briefing, I attended with OpenAI executives a few days before the launch, OpenAI co-founder and CEO Sam Altman said, there's obviously been a huge shift in software agents over the last few months as the models have crossed a threshold of real utility. 5.2 in particular is a model that many of us have found can do extremely complex things, and we realized we started to feel limited by the interface. The new Mac app is intended to help mitigate that limitation. OpenAI described Codex as expanding from single agent coding operations to being at the core of multi-agent software life cycles. Rather than pairing with a developer on a single edit, Open AICs programmers as coordinating teams of agents across all of the design,

build, ship, and ongoing maintenance stages of work. The latest version of Codex, GPT5.2 Codex, only launched in mid-December, yet according to the company Codex usage has nearly doubled since that time, with more than a million developers using it in the last month. In the briefing, Altman stated that GPT5.2 Codex, quote, is the fastest adopted model that we have ever made. He also reported on an extreme level of momentum using this tool with usage growing more than 20 times since last August. In addition to independent developers like me, the company reported that major customers include Cisco, Ramp, Virgin Atlantic, Vanta, Duolingo, and Gap, end quote. This sort of weird back and forth between Open AI and Invidia is continuing. We spoke about

how Jensen Wong was maybe like, I don't know if Open AI's business is well-run enough. only than to quickly walk that back because OpenAI is still Nvidia's biggest customer. So I wonder if this is a bit of a shot back across the Nvidia bow sort of leak. Sources told Reuters that OpenAI has been unsatisfied with some of Nvidia's AI chips used for inference and has been seeking alternatives since at least last year, including from Cerebrus and Grok. Quote, seven sources said that OpenAI is not satisfied with the speed at which NVIDIA's hardware can spit out answers to chat GPD users for specific types of problems, such as software development and AI communicating with other software.

It needs new hardware that would eventually provide about 10% of OpenAI's inference computing needs in the future, one of the sources told Reuters. The chat GPT maker has discussed working with startups including Cerebris and GROC to provide chips for faster inference, two sources said, but NVIDIA struck a $20 billion licensing deal with GROC that shut down OpenAI's talks, one of the sources told Reuters. NVIDIA's decision to snap up GROC looked like an effort to shore up a portfolio of technology to better compete in a rapidly changing AI industry chip industry executive said, NVIDIA in a statement said that GROC's intellectual property was highly complementary to

NVIDIA's product roadmap. NVIDIA's graphics processing chips are well-suited for massive data crunching necessary to train large AI models like chat GPD that have underpinned the explosive growth of AI globally to date. But AI advancements increasingly focus on using training models for, for inference and reasoning, which could be a new bigger stage of AI, inspiring Open AI's efforts. The chat GPT makers searched for GPU alternatives since last year focused on companies building chips with large amounts of memory embedded in the same piece of silicon as the rest of the chip

called S-RAM. Squishing as much costly S-RAM as possible onto each chip can offer speed advantages for chatbots and other AI systems as they crunch requests for millions of users. Inference requires more memory than training because the chip needs to spend relatively more time-fetching data from memory than performing mathematical operations. Nvidia and AMD GPU technology relies on external memory, which adds processing time and slows how quickly users can interact with a chatbot. Inside OpenAI, the issue became particularly visible in Codex, its products for creating computer code, which the company has been aggressively marketing, one of the sources added. OpenAI staff attributed some of Codex's

weaknesses to Nvidia's GPU-based hardware, one source said. In a January 30th call with reporters, Sam Altman said that customers using OpenAI's coding models will put a big premium on speed for coding work. One way OpenAI will meet that demand is through its recent deal with Cerebrus, Altman said, adding that speed is less of an imperative for casual chat GPT users. Competing products such as Anthropics Claude and Google's Gemini benefit from deployments that rely more heavily on the chip's Google made in-house called Tensor Processing Units or TPUs, which are designed for the sort of calculations required for inference and can offer performance advantages over, general-purpose AI chips like the Nvidia design GPUs, end quote. In addition, oddly, Oracle tweeted, quote, the Nvidia OpenAI deal has zero impact on our financial relationship with OpenAI. We remain highly confident in Open AI's ability to raise funds and meet its commitments, end quote. You should read

into that commitments to us. But I'm pointing out, if you Oracle are weighing in there saying that you're sure Nvidia is still going to invest in Open AI, it kind of makes people think you're actually worried that's not going to happen, and all of that revenue you anticipated might not end up showing up. You do realize that, right? Finally today, quoting Bloomberg, Waymo, Alphabet's Autonomous Driving Unit, raised $16 billion at a $126 billion valuation, a funding round that reflects its rapid as a Robotaxy pioneer. The financing was led to. by new investors, Sequoia Capital, DST Global, and Dragonere Investment Group. Waymo said in a statement Monday, the new valuation includes the money raised.

Bloomberg News reported earlier that Alphabet would be contributing $13 billion to the investment. Waymo confirmed in Monday's announcement that its parent company is participating in the financing without giving exact terms. This infusion of capital will ensure we are positioned to move forward with unprecedented velocity while maintaining our industry-leading safety standards. Weimo co-chief executive officers, Takedra Mawakana, and Dmiti Dolgov said in a blog post, our focus is now on global scale.

Despite logging about 20 million rides in 2025, Waymo's scale remains modest. Bloomberg intelligence analyst Mandip Singh wrote in a January 31st note after Bloomberg's report on Waymo's fundraising effort, end quote. Yeah, but that's why I'm flagging this. That size of a raise, that much money can only mean one thing. Waymo is about to put the pedal to the metal in terms of scale, if you forgive the pedal to the metal analogy.

I think people are continuing to underestimate the degree to which you're just going to blink, and one day suddenly you're going to look up and self-driving taxis are just a part of your everyday life. Arsenal game today, everybody, up the gooners. Since I'm going to be traveling tomorrow, you're going to get a bonus interview episode, so I'll be back talking to you live on Thursday, but you're going to love the interview tomorrow with the founder of Ring. And Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th,

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