SpaceXAI

SpaceXAI (formerly xAI), legally incorporated as X.AI LLC, is a subsidiary of the American spaceflight company SpaceX working in the areas of artificial intelligence (AI) and social media.

SpaceXAI's flagship products are the generative AI chatbot Grok and the social network X, which was acquired in March 2025. It also constructed the Colossus supercomputer and launched a data center business. In August 2026 it completed the acquisition of the AI coding company Cursor (Anysphere). Prior to being acquired by SpaceX in February 2026, SpaceXAI's assets were part of a standalone corporation named X.AI Corp., founded by Elon Musk and 11 researchers in 2023.

History

Beginnings (2023–2025)

Elon Musk founded xAI on March 9, 2023. The company's founding team of AI researchers were Jimmy Ba, Zihang Dai, Kyle Kosic, Manuel Kroiss, Ross Nordeen, Toby Pohlen, Christian Szegedy, Yuhuai Wu, Greg Yang, and Guodong Zhang, led by chief engineer Igor Babuschkin, formerly associated with Google DeepMind. Musk announced xAI on July 12, 2023.

As of May 2026, xAI was headquartered in the San Francisco Bay Area. It was initially incorporated in Nevada as a public-benefit corporation. By May 2024, it had dropped the public-benefit status.

As of August 2024, Musk was diverting a large number of Nvidia chips that had been ordered by Tesla, Inc. to X and xAI. On December 23, 2024, xAI raised US$6 billion in a private funding round supported by Fidelity, BlackRock, Sequoia Capital, among others, making its total funding to date over $12 billion. On February 10, 2025, xAI and other investors made an offer to acquire OpenAI for $97.4 billion. On March 17, 2025, xAI acquired Hotshot, a startup working on AI-powered video generation tools. On March 28, 2025, Musk announced that xAI acquired sister company X Corp., the developer of social media platform X (formerly Twitter), which was previously acquired by Musk in October 2022. The deal, an all-stock transaction, valued X at $33 billion, with a full valuation of $45 billion when factoring in $12 billion in debt. Meanwhile, xAI itself was valued at $80 billion. Both companies were combined into a single entity called X.AI Holdings Corp.

On July 14, 2025, United States Department of Defense announced that xAI had received a $200 million contract for AI in the military. On September 12, xAI laid off 500 data annotation workers. The division, previously the company's largest, had worked to train Grok, xAI's chatbot.

xAI purchased a third building on December 30, 2025 to increase its training capacity to nearly 2 gigawatts of compute power. Simultaneously, xAI announced plans to expand its Colossus supercomputer to have at least 1 million graphics processing units.

Subsidiary of SpaceX, restructuring and rebranding (2026–present)

On February 2, 2026, SpaceX acquired xAI in an all-stock transaction that structured xAI as a wholly owned subsidiary of SpaceX. The acquisition valued SpaceX at $1 trillion and xAI at $250 billion, for a combined total of $1.25 trillion.

In February 2026, following the SpaceX acquisition, xAI laid off some employees as the company was restructured into four primary development teams. Around this time, half of the company's co-founders left. In early March 2026, two more co-founders, Guodong Zhang, head of xAI's Imagine team, and Zihang Dai, left, coinciding with an audit performed by SpaceX and Tesla, leaving only Musk and one other co-founder, Ross Nordeen, who left later in the month.

On April 10, 2026, xAI restructured its staff. Chief Financial Officer Anthony Armstrong departed the company and Michael Nicolls, vice president of SpaceX's Starlink, became xAI's president.

On April 21, 2026, xAI (by then operating under SpaceX) announced that it struck a deal with software company Anysphere giving SpaceX the right to acquire the company for $60 billion later in 2026, or to pay $10 billion for work they are doing together.

In May 2026, Musk announced that xAI would cease to exist as a separate company, with Grok and X now being the AI division of SpaceX. In the same month, it laid off another 10 employees and restructured its Grok team.

In July 2026, xAI was rebranded as SpaceXAI.

On June 16, 2026, SpaceX exercised the option and announced an all-stock acquisition of Anysphere (Cursor) for $60 billion, with closing expected in the third quarter of 2026. The transaction closed on August 14, 2026. Cursor became a wholly owned subsidiary of SpaceX and joined the SpaceXAI team; outstanding Anysphere shares were converted into SpaceX Class A common stock based on a $60 billion implied equity value.

Environmental impact

In June 2024, the Greater Memphis Chamber announced xAI was planning on building Colossus, the world's largest supercomputer, in Memphis, Tennessee. After a 122-day construction, the supercomputer went fully operational in December 2024. Local government in Memphis has voiced concerns regarding the increased usage of electricity, 150 megawatts of power at peak, and while the agreement with the city is being worked out, the company deployed 14 VoltaGrid portable methane-gas powered generators.

Environmental advocates said that the gas-burning turbines emit large quantities of gases causing air pollution, and that xAI was operating the turbines illegally, because it did not have the necessary permits. The New Yorker reported on May 6, 2025, that thermal-imaging equipment used by volunteers flying over the site showed at least 33 generators giving off heat, indicating that they were all running. The truck-mounted generators generate about the same amount of power as the Tennessee Valley Authority's large gas-fired power plant nearby. In June 2025, the NAACP threatened to file a lawsuit. From 2020 through 2024, the Memphis metro area violated national smog standards. In 2025, the American Lung Association again gave Shelby County an "F" for smog. The predominantly African-American residents of Southeast Memphis were reported to face a risk of developing cancer at four times the national average in 2013, potentially due to pre-existing air pollution.

In July 2025, the Shelby County Health Department granted xAI an air permit for the project. On November 26, 2025, xAI announced plans to build a solar farm near Colossus with an estimated output of 30 megawatts of electricity, which is 10% of the data center's estimated power use.

The NAACP and other civil rights groups sued xAI in April 2026, alleging that the Colossus 2 data center is operating illegally without the necessary federal Clean Air Act permits. Reuters found that xAI's Colossus 2 data center has gas turbines with potential emissions that are "far beyond the threshold" that requires federal permits.

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