SpaceX, Elon Musk’s owned tech giant, specializing in Space Technology, has pledged to throw in a whopping $2 billion in Musk’s AI startup, xAI. The investment is part of a $5 billion equity fundraising round. It’s interesting to note that this investment would be the first ever direct investment of SpaceX in their CEO’s side hustle. This amounts the combined value of both the entities to a jaw dropping $113 billion, bigger than the amount of the GDP of Slovakia ($110 billion) and Georgia ($25 billion).
One may think, it’s just another big company supporting its sister company. But, this is not that simple. It’s Elon Musk architecting a carefully integrated AI empire, compensating over a deteriorating political influence in Washington. It’s fascinating to see how this defies the typical corporate practice of external investments. Musk is to develop an empire that stands tall on its own without fearing investors’ constraints and conflicting priorities.
Not to forget, Trump has recently rescinded on Jared Isaacman’s nomination as NASA Chief, citing Isaacman’s affiliation with Elon Musk, and replaced him with Sean Duffy, the Transportation Secretary. In this aftermath, it’s no brainer that Elon musk does not count on favorable government treatment or freebies anymore. In a way, this merger could be dubbed as a hedge in the face of Musk’s political rift with the Trump administration. Musk is doubling down on technological and capital sufficiency, rather than relying on government contract and regulatory goodwill, which seemed to be the arrangement when the Trump-Musk relationship was hunky dory.
Such mergers speak much about Musk striving for self-sufficiency from technology to capital. As, the plan here is loud and clear; SpaceX enjoys modern and sophisticated AI assistance for its operations, while xAI helps itself with unbroken capital flow for building massive and technologically competitive infrastructure, and Tesla’s vehicles and robots stand to benefit from the both.
In this age, when AI is the biggest differentiator, Musk’s approach stands to render his AI ambitions the “rocket fuel” it might need to challenge OpenAI’s dominance, insulated and unaffected by the unpredictable and ruthless winds of Washington.
