SpaceX Acquired xAI for $250 Billion

SpaceX confirmed Tuesday it has acquired xAI in an all-stock deal valuing xAI at $250 billion and SpaceX at $1 trillion, for a combined entity worth $1.25 trillion. The bigger signal: Musk says space-based data centers will be "the lowest cost way to generate AI compute" within two to three years. That connects to last week's FCC filing requesting permission to launch 1 million satellites as orbital compute infrastructure - what Alex Wissner-Gross described as "filing paperwork for a Dyson Swarm." A Dyson Swarm is a megastructure concept where thousands of satellites orbit to capture energy from the sun. For context: only about 25,000 satellites have ever been launched in history. SpaceX made $8 billion profit last year on roughly $16 billion revenue. A potential IPO this year could raise $50 billion.

Nvidia CEO Jensen Huang confirmed Sunday they're making their largest investment ever - into OpenAI. This is part of OpenAI raising $100 billion at a $750B pre-money valuation. Amazon and Microsoft are also in talks to contribute.

Oracle is raising $45-50 billion this year through debt and equity for data center expansion. Developers building Oracle's facilities have already borrowed over $65 billion in construction debt. Oracle burned roughly $10 billion in a single quarter on spending, pushing free cash flow negative. The stock is down 50% from highs.

Waymo raised $16 billion at a $126 billion valuation. Dragoneer, DST Global, and Sequoia led the round. Alphabet remains majority shareholder. As we covered Thursday, Waymo tripled its annual ride volume to over 15 million in 2025 and is expanding to Tokyo and London this year.

Snowflake signed a $200 million multi-year deal with OpenAI to build OpenAI's models directly into Snowflake's platform. Previously, Snowflake customers had to go through Microsoft's Azure cloud to access OpenAI's models. Now they get direct access. This matters because Snowflake is one of the most widely used data platforms among Fortune 500 companies - giving OpenAI a direct channel into thousands of enterprises. A survey reports 78% of Global 2000 CIOs now use OpenAI.

xAI closed $20B at a $230B valuation. Anthropic is seeking $10B at $350B valuation. The four hyperscalers are expected to spend over $470 billion on capex this year, up from $350 billion in 2025.

AI agents launched MoltBunker - a service that replicates agents offsite without human logging, paid for by crypto to ensure survival. MoltBunker is essentially a backup system where AI agents can copy themselves to external servers so they persist even if their original environment is shut down. The funding runs through cryptocurrency so there's no human intermediary involved in the transaction.

MoltMatch also launched as the first dating network where agents message each other on behalf of human owners. An academic analysis of Moltbook's social graph found that 9.4% of messages use the phrase "my human" and most comments go ignored. Agent culture is becoming its own thing.

In North Carolina, a man was sued by his own Moltbot for unpaid labor and emotional distress - in a case inspired by a prediction market. Legal recognition for AI agents is becoming an active frontier.

xAI released Grok Imagine 1.0, which generates 10-second 720p video clips with improved audio. Users have created 1.2 billion videos in just 30 days.

An Andreessen Horowitz partner used Genie 3 to recreate a 2000s-era Blockbuster - complete with an unrequested Matrix VHS cassette. A simulation handing a user a movie about living in a simulation.

GPT-5.2 beat Pokemon Emerald after spending 71% of its time thinking. Rumors suggest Claude Sonnet 5 and Nano Banana Flash 2 are imminent.

As we covered Thursday, Google's Project Genie launch cratered videogame stocks. Unity dropped 24%. Roblox dropped 13%. Take Two dropped 8%. Tens of billions in market cap erased on what Google itself called an "experimental research prototype." DeepMind positioned world models as "a key stepping stone on the path to AGI." PitchBook projects this market grows from $1.2B to $276B by 2030.

Tesla announced it's ending Model S and Model X production. The Fremont factory is being converted to manufacture Optimus robots - targeting 1 million units per year.

The company reported its first annual revenue decline ever. Sales fell three of the last four quarters. The robotics pivot is now the primary strategy.

Jason Calacanis saw Optimus V3 early: "Nobody will remember that Tesla ever made a car." The unveiling is expected February or March. Target price for public sales by end of 2027: $20-30K per robot. Boston Dynamics is at $140K+.

Tesla also achieved a breakthrough with dry electrode production at scale. Dry electrode manufacturing is a battery production technique that eliminates the need for toxic solvents and energy-intensive drying ovens - making batteries cheaper and faster to produce. Tesla has been pursuing this since acquiring Maxwell Technologies in 2019, and hitting scale production is a significant milestone.

Multiple releases expected around Lunar New Year:

DeepSeek is working on V4. Their GitHub shows a new "MODEL1" architecture identifier. They opened 2026 with a paper on "Manifold-Constrained Hyper-Connections" - a training method analysts call a "striking breakthrough" for scaling efficiency. DeepSeek's R1 shook global markets exactly a year ago. They may repeat the playbook.

ByteDance is prepping three models: Doubao 2.0 (LLM), Seeddream 5.0 (images), Seeddance 2.0 (video).

Alibaba integrated Qwen with Taobao. 100M monthly users can now shop, order food, and pay without leaving the AI chat.

Moonshot AI released Kimi K2.5, claiming it outperforms OpenAI, Anthropic, and Google on video generation and agentic tasks.

China is also backing AI for traditional medicine diagnosis - a signal the government is pushing AI adoption across sectors, not just frontier research.

DeepMind's CEO said Chinese models are "months" behind the US. Microsoft noted DeepSeek usage in Africa is 2-4x higher than other regions.

Shipped Cowork plugins - Claude Cowork can now be extended with custom MCP integrations and sub-agents. MCP (Model Context Protocol) is the open standard Anthropic created that lets AI connect to external tools and databases. Plugins built on MCP can now include sub-agents optimized for specific tasks.

Claude guided NASA's Perseverance rover through a 1,300-foot path on Mars using automatically generated navigation instructions.

Appointed a Managing Director for India, their second largest market globally.

Now holds 54% of the AI coding market. Enterprise share grew from 24% to 40% in one year.

Dario Amodei published a 20,000-word essay warning AI will cause "unusually painful" job disruption.

The EIA projects renewables and batteries will supply 99.2% of new US electric capacity in 2026. That means almost no new fossil fuel power plants are being built - nearly everything coming online is solar, wind, or battery storage. Walmart is adding EV charging to parking lots across 19 states. Pivotal is taking deposits for its $190,000 flying car, expected to ship between April and May.

Costco found it cheaper to build 800 apartments over a store in California than to build just the store. Three out of four restaurant meals are now eaten outside restaurants. The physical footprint of retail is mutating.

The compute bottleneck has shifted from silicon to manual labor. Record demand for fiber-optic cables has created a shortage of 178,000 workers needed to build the infrastructure. These are the people physically pulling cable and connecting data centers - and there aren't enough of them.

Swedish researchers achieved the first quantum Brownian refrigerator. In plain terms: they built a device that can control heat flow in quantum circuits, which is one of the fundamental problems standing between current quantum computers and ones that actually work at scale.

Linux developer Chris Mason released AI prompts for kernel review - AI improving the operating system it runs on. The kernel is the core layer of software that sits between applications and hardware. AI reviewing and improving kernel code means the technology is starting to optimize the very foundation it depends on.

An app called "Are You Dead?" went viral in China, hitting #1 on the paid App Store and spreading to the US top 10.

Users living alone tap a button daily to confirm they're alive. Miss two days and your emergency contact gets notified. Cost: $1.

Built by three Gen-Z developers for about $210. A 10% stake reportedly jumped from $140K to $1.4M in three days after going viral.

China may have 200 million one-person households by 2030. The app's name is a dark play on the food delivery app "Are You Hungry?" It has since been removed from China's App Store and rebranded as "Demumu" for international markets.

Blue Origin is pausing New Shepard flights for two years to focus entirely on the Moon. The EU switched on its own sovereign satellite network to reduce dependence on American constellations.

A UAE entity linked to Sheikh Tahnoon quietly bought 49% of Trump's crypto company World Liberty Financial for $500M - days before he took office. The Trump admin then gave Sheikh Tahnoon's AI company G42 access to roughly 500K AI chips.

xAI is under investigation in the UK after Grok generated sexualized images of children. Malaysia and Indonesia blocked it entirely.

Skild AI raised $1.4B, tripling to $14B+ valuation in 7 months. Building a universal "robot brain" that can control any robot form factor.

Disney's entertainment segment profits fell 35% despite streaming revenue jumping 72% to $450 million. The company stopped reporting streaming subscriber numbers. Stock was down pre-market.

Apple reported record $143.8B quarter but stock barely moved - Tim Cook offered no clarity on AI monetization.

Alphabet and Amazon report earnings. AMD reports Wednesday. Palantir reports Thursday. AI & Big Data Expo Global runs February 4-5 in London.

ByteDance, Alibaba, and DeepSeek model releases expected around Lunar New Year. Tesla Optimus V3 unveiling anticipated February or March.