An AI company with an arsenal of spacecraft: what exactly is SpaceX?

Hello, and welcome to TechScape. I’m your host, Blake Montgomery, US tech editor at the Guardian, writing to you as I listen to George Handel’s Messiah for Easter.
We’re about to get an unprecedented, detailed look into one of the world’s biggest and weirdest business empires
SpaceX filed confidentially for an initial public offering on the US stock market last week at a reportedly astronomical valuation. My colleague Nick Robins-Early reports:
Elon Musk’s company, which has become a dominant power in both space travel and satellite communications, could seek a valuation upwards of $1.75tn. The confidential filing will give regulators a period to review and discuss the company’s financial disclosures before investors and the public are able to view them.
The IPO could take place as early as June, Bloomberg reported, in what is expected to be a banner year for high-value public offerings. Musk’s rival OpenAI is also planning to go public later this year at an immense valuation, announcing on Tuesday that it had closed a funding round of $122bn, in addition to fellow AI firm Anthropic preparing its own IPO. SpaceX is the parent company of Musk’s own artificial intelligence company, xAI.
With the IPO filing, Musk has paved a second path to becoming the world’s first trillionaire. His estimated 43% stake in SpaceX has become his largest asset, according to Forbes. His struggling car company Tesla, which he says is moving on from automobiles to become a robotics company that will automate all labor, agreed to pay him $1tn last year. Shareholders in Tesla voted in November to approve a pay package that would amount to $1tn if Musk guides the company to major success in the coming 10 years.
SpaceX is a bizarre agglomeration. It is the aerospace company SpaceX, the US space agency’s largest contractor for interstellar launches and the maker of some of the most advanced rockets on the planet. It is also the satellite internet company Starlink, which owns and operates just over half of all satellites orbiting earth and which sells internet service that has become a vital product on passenger flights, in rural areas, and in war. It is also the artificial intelligence company xAI, which makes the Grok chatbot, most famous for removing the clothes of real women and girls in images by the thousands, neo-Nazily declaring itself “MechaHitler,” and winning a $200m contract with the US military. xAI, meanwhile, owns X, formerly Twitter, one of the world’s best-known and least-profitable social networks, notable for brevity, political influence, harassment and hate speech, and overheated discourse.
If you were to describe SpaceX to an alien that crashed into one of its satellites, you could say that SpaceX is an online advertising company that launches rockets and might one day make datacenters in space. You could say it is an AI company with an arsenal of spacecraft, led by the richest man in the world, or that it is a satellite company with a psychotic chatbot, helmed by a founder who fired hundreds of thousands of US government workers in six months. You could say that the US president used SpaceX’s website to incite an insurrection and announce he had Covid. Somehow that jumble of things makes sense to investors and bankers, who have valued SpaceX at $1.75tn.
SpaceX will be obligated to file paperwork in the coming months that details how all these pieces fit together, forms meant to convince regulators and investors alike that there are no Jenga blocks missing. This filing with the US Securities and Exchange Commission, known as an S-1, will include a prospectus, audited financial statements, and forecasts of business risks.
In their S-1 filings, companies describe their business models and strategies in detail. SpaceX will give details on the wild stack of businesses that comprise it and will need to explain how they fit together. The rationale for its recent acquisition of xAI may provide a clue. Via Nick: SpaceX acquired Musk’s xAI in February – citing plans to build solar-powered datacenters in space that could help meet the computer and energy demands of the AI boom.
Companies must also hand over their balance sheets to accountants to complete audited financial statements. We will soon learn just much money SpaceX earns, and from what pillars of its bizarre business. The two largest are likely to be its launch contracts with Nasa and subscriptions to Starlink’s internet service, which are themselves facilitated by the rocket business.
Outer space is a promising, but untested, frontier in the global – perhaps soon interstellar – rollout of datacenters. They are theoretically possible, and in active development, but a guaranteed business opportunity they are not.
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Opinions on AI
Backlash shows how much readers don’t want AI
On the opposite end of the spectrum of AI use from Silicon Valley are artistic professions, where accusations of using AI as a shortcut can ruin a career. Audiences expect authenticity, originality, and accuracy — three qualities generative AI tools have great difficulty replicating.
Readers of novels and newspapers see using a chatbot’s words as severing a bond of trust. Two writers faced major backlash in recent weeks for their use of AI; one lost a book deal, another a plum job.
The publisher Hachette scuttled the release of a horror novel, Shy Girl, after speculation of AI use prompted an internal review that confirmed it.
The book, Shy Girl by Mia Ballard, had been scheduled for release in the US this spring under Hachette’s Orbit imprint. However, the publisher confirmed it had halted publication after an internal review. The decision comes after weeks of online speculation about the novel’s origins, during which readers on platforms such as Goodreads and Reddit had questioned whether sections of the text bore hallmarks of AI-generated prose.
Ballard has denied personally using AI to write the novel. In comments to the New York Times, she said an acquaintance she had hired to work on an earlier self-published version incorporated AI tools.
“This controversy has changed my life in many ways and my mental health is at an all time low and my name is ruined for something I didn’t even personally do,” she wrote in an email to the New York Times.
Read more: Hachette pulls horror novel Shy Girl after suspected AI use
A European journalist failed to fact-check the quotes a chatbot had retrieved for him, a mistake he had publicly advised others not to make.
The publisher of the Dutch newspaper De Telegraaf and the Irish Independent has suspended one of its senior journalists after he admitted using AI to “wrongly put words into people’s mouths”.
The experienced journalist said he had summarised reports using AI tools such as ChatGPT, Perplexity and Google’s NotebookLM, and not checked whether the quotes from those summaries were accurate. He subsequently published them in his Substack newsletter.
The errors were highlighted by an investigation by one of Mediahuis’s own titles, NRC, where [Peter] Vandermeersch had been editor-in-chief in the 2010s. NRC alleged Vandermeersch had published “dozens” of quotes that were false and that seven quoted individuals in his posts said they had not made the statements attributed to them.
Read more: Senior European journalist suspended over AI-generated quotes