Top News

Elon Musk has announced a major change for his artificial intelligence startup xAI. The billionaire entrepreneur says xAI will no longer exist as a separate company and will instead become part of SpaceX’s growing AI business.

The move could reshape Musk’s AI ambitions and also change the future of Grok, the chatbot developed by xAI to compete with ChatGPT, Claude, and Google Gemini.

Musk made the announcement on X while replying to a post about a new partnership between SpaceX and AI company Anthropic. A user had described the agreement as a “smart move for SpaceX/xAI.” Musk responded by saying, “xAI will be dissolved as a separate company, so it will just be SpaceXAI, the AI products from SpaceX.”

At the moment, there is no official mention of “SpaceXAI” on SpaceX’s website. However, Musk’s statement strongly suggests that all future AI products, including Grok, could now operate directly under the SpaceX brand.

Why Musk Is Shutting Down xAI as a Separate Company

xAI was launched in 2023 with a bold promise. Musk said the company would build a “truth-seeking” and “pro-humanity” AI system that could rival OpenAI.

The startup quickly became known for Grok, an AI chatbot integrated into X. Unlike many competitors, Grok was marketed as less politically correct and more unfiltered. That approach helped the chatbot gain attention online, but it also created controversies.

Last year, xAI faced criticism after some users misused Grok-generated tools and features for harmful content, including creating fake explicit images. The company also struggled to catch up with larger AI rivals such as OpenAI, Anthropic, and Google.

Internally, xAI has seen major turbulence too. Several senior figures and co-founders left the company in recent months. Reports suggest that by April this year, 11 out of the 12 original co-founders had exited, leaving Musk as the only remaining founding member.

The latest decision appears to be part of Musk’s larger plan to simplify and combine his businesses around AI and infrastructure.

SpaceX and Anthropic Strike Major AI Deal

The announcement comes alongside a surprising partnership between SpaceX and Anthropic, the company behind Claude AI.

Under the agreement, Anthropic will reportedly use the full compute capacity of SpaceX’s Colossus 1 supercomputer facility in Memphis, Tennessee. The data centre contains more than 220,000 Nvidia AI chips and offers over 300 megawatts of compute power.

Interestingly, Colossus 1 was originally built to support Musk’s own AI ambitions through xAI.

The deal is significant because Anthropic is also a direct rival to xAI. Musk has previously criticised the company publicly and once claimed that Anthropic “hates Western Civilization.”

However, his tone has now changed.

On X, Musk said he recently spent time with Anthropic’s senior leadership team and was impressed by their approach to AI safety.

“Everyone I met was highly competent and cared a great deal about doing the right thing,” Musk wrote.

What Happens to Grok Now?

Musk has not announced any plans to shut down Grok. Instead, the chatbot and future AI tools are expected to continue under the new “SpaceXAI” structure.

This could give Grok access to much larger computing resources. SpaceX already controls powerful AI infrastructure through Colossus 1 and Colossus 2, and Musk is also exploring plans for orbital data centres in space.

Bringing AI directly under SpaceX may also help Musk prepare for a possible SpaceX IPO, which is rumoured to be one of the largest public offerings in history.

Industry experts believe the merger could help Musk create a more unified AI ecosystem instead of operating multiple overlapping companies.