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Friday, January 30, 2026

30: AI

Musk Industry: The Inevitable Company No One Sees Coming SpaceX is considering a merger with Tesla. Or maybe xAI. Or maybe all three. ............ On January 29th, 2026, Bloomberg reported that SpaceX - currently valued at $800 billion - is weighing a merger with either Tesla or xAI ahead of a planned June IPO .............. Tesla's market cap sits around $1.4 trillion. SpaceX's last secondary sale valued it at $800 billion, with an IPO target of $1.5 trillion. xAI just raised $20 billion at a $230 billion valuation. Add them up and you're looking at a combined entity worth over $3 trillion. ..................

Tesla's next-generation chip - AI6 - is designed to work in vehicles, robots, and data centers. One chip architecture across all products. The same brain for your car, your robot, and the cloud.

................ Tesla, SpaceX, and xAI aren't just financially entangled - they're architecturally entangled. The chip strategy only makes sense if they're unified. .............. Then, tonight - literally as I'm writing this - Elon dropped another hint.

Someone asked about a Starlink phone. His response: "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."

................... A phone optimized for neural nets. Not for apps, not for cameras - for AI inference. That's the same design philosophy as AI6. One architecture optimized for neural network performance across every device category. ............ Tesla brings the physical foundation. Million of vehicles on the road, collecting data every second. Over seven billion miles of FSD driving data - more than anyone else by orders of magnitude. They're building the Cortex supercomputer with 67,000 H100 equivalents. They have manufacturing expertise that can produce two million cars per year. And they're developing Optimus, the humanoid robot that could eventually dominate a $40 trillion labor market. ................. SpaceX brings space. 9,000+ satellites already in orbit - that's 65% of all active satellites. Starlink has nine million subscribers. Their V3 satellites launching in the first half of 2026 will have over 1 terabit per second of downlink capacity each. And they have Starship, the rocket that can put anything, anywhere. ................ xAI brings the AI brain. Grok is training on Colossus - a supercomputer with 230,000 GPUs. That's the largest AI training cluster in existence. They have a $200 million contract with the Pentagon. And crucially, they own X - which means they have real-time access to the world's conversation in a way no other AI company can match. ............... There's a concept in AI called "embodied intelligence" - the idea that AI systems learn better when they can interact with the physical world. It's why a child who has touched hot things understands "hot" in a way that an AI trained on text never can. .................... Tesla has the largest embodied AI data collection system ever built. Every Tesla vehicle is essentially a data collection robot, feeding real-world driving scenarios back to train the neural network. Seven billion miles of data. Edge cases that no simulator could generate. Real humans making real decisions in real situations. ...................... And now that same approach is being applied to Optimus. The humanoid robot learns by watching video of humans performing tasks. It builds world models - internal representations of how the physical world works. The same neural world simulator that powers FSD now powers Optimus. ................... Ashok Elluswamy, Tesla's VP of AI, confirmed this explicitly: "The great thing about all the above points is that they not just solve for vehicle autonomy, but also seamlessly transfer to Optimus." ................. One AI brain for cars. The same brain for robots. Eventually the same brain for satellites and phones. ............... xAI's Grok adds another dimension. Grok is trained on real-time data from X - the world's conversation happening in the moment. It has access to information that no other AI company can match. Combine that with Tesla's physical world data and you get something unprecedented: an AI that understands both the digital and physical world in real-time. ................ This is what a unified company unlocks. Not just cost synergies or capital efficiency - but a fundamentally different kind of AI. ............... This company would control chips, data, training, inference, vehicles, robots, rockets, satellites, and energy storage. It would control the manufacturing to build all of these things at scale. It would control the AI models that make them intelligent. And it would control the distribution channels to deploy them globally. ................. I've been following Tesla since 2012. I've never seen anything like this. Most companies specialize. They pick a lane and try to dominate it. What Musk is building is different. He's not picking a lane - he's building the highway. .............. Solar energy in space is free and continuous. Cooling in the vacuum of space is essentially free. The biggest costs for AI datacenters on Earth - power and cooling - disappear in orbit. ................. The combined entity wouldn't just be the sum of its parts. The synergies are real. Tesla's AI chips powering xAI's training. xAI's models improving Tesla's FSD and Optimus. SpaceX's satellites distributing inference globally. Tesla's Megapacks powering xAI's datacenters. Tesla's solar panels powering xAI's datacenters launched by SpaceX. Tesla's robots building rockets. xAI's Grok orchestrating Tesla's Robotaxi fleet, powered by Starlink. ........................ And consider Cybercab. Tesla's Robotaxi-optimized car is expected to start production in April 2026. No steering wheel, no pedals - just AI driving. It runs on the same neural network as FSD, trained on the same data from the same fleet. At $20,000 per vehicle and $0.25 per mile operating cost, it undercuts human-driven transportation by a factor of five or more. ................. The merger makes strategic sense at a fundamental level. All paths converge to AI6. The chip strategy only works if the companies are unified. The orbital datacenter vision only works if SpaceX and xAI are combined. The embodied AI thesis - where real-world data from vehicles and robots trains the next generation of AI - only scales if the data sources are integrated.

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