[crystal_revenge]

Because this move is entirely financial engineering to hide losses just like the roll up of X in to xAI.

None of this has anything to do with business or innovation. Do you not immediately see that? Most of my friends reaction to this news was that this is so obvious it's almost funny (or actually it is funny, since most were laughing as they read the headline).

I'm curious how you could not understand the relevance of the quote unless you were aggressively trying to not understanding it.

[shermantanktop]

I understand it now, after reading the thread. There's a reason for that.

I have not been following the machinations of X very closely. I don't have the corporate structure of Elon's empire in my head, nor do I have the Meta or Alphabet/Google hierarchies in there. I couldn't have told you about the history of xAI beyond that it exists.

So that's plain ignorance of something you consider common knowledge, but I don't, rather than "aggressively trying to not understand it." And that phrase is particularly grating btw.

[livefeather]

> I'm curious how you could not understand the relevance of the quote unless you were aggressively trying to not understanding it.

Monet probably wondered how other people couldn't see purple in a haystack.

[nashashmi]

Tesla acquiring solarcity was the same thing over. It did not make sense. Then and it does not make sense now. But the distortion field is so great no one notices.

[slg]

SolarCity and Tesla made more surface level sense just being in the same general vicinity since they're both fundamentally green energy companies. That made it easy to spin questions about the financials with some CEO-speak about synergy.

However, the way Musk has become less subtle with this tells a story. He got away with these shady financial dealings multiple times so he's now becoming even more brazen and transparent with this behavior. We have gotten to the point in which the spin needed to justify his moves is the physics-defying viability of datacenters in space.

The distortion field will keep growing as long as he keeps getting away with it.

[nashashmi]

I come to realize that spaceX is an ISP as well. And now with twitter, they are a social network too. Space launcher + internet network + social media + (next big thing). It would not be long until they start providing data centers (in space). And with the Elon distortion stock pricing, Wall Street will reward every business venture no matter how stupid he gets himself into. Like flame throwers. Or wine.

[ta9000]

Doesn’t Tesla have a large and profitable storage business now? Probably could have just built that instead of buying SolarCity.

[nashashmi]

Tesla customers make great targets to sell Tesla solar. And Solar city customers make great targets of Tesla power banks. Though they should be selling old heavy Tesla batteries for stationary power storage.

[throwpoaster]

Why are space data centres physics defying?

[modernpacifist]

Likely the intended meaning here is that the practicality of space data centers goes against the physical realities of operating in space. The single most prevalent issue with operating anything in space is heat dissipation in that the only method of doing so is via radiation of heat, which is very slow. Meanwhile, the latest Nvidia reference architectures convert such ungodly amounts of power into heat (and occasionally higher share prices) that they call for water cooling and extensive heat-exchange plant.

Even if one got the the economics of launching/connecting GPU racks into space into negligable territory and made great use of the abundent solar energy, the heat generated (and in space retained) by this equipment would prevent running it at 100% utilization as it does in terrestrial facilities.

In addition to each rack worth of equipment you'd need to achieve enough heat sink surface area to match the heat dissipation capabilities of water-cooled systems via radiation alone.

[MobiusHorizons]

Not physics defying, just economically questionable.

The main benefits to being in space are making solar more reliable and no need to buy real estate or get permits.

Everything else is harder. Cooling is possible but heavy compared to solar, the lifetimes of the computer hardware will probably be lower in space, and will be unserviceable. The launch cost would have to be very low, and the mean time between failure high before I think it would make any economical sense.

It would take a heck of a lot of launches to get a terrestrial datacenter worth of compute, cooling and solar in orbit, and even if you ship redundant parts, it would be hard to get equivalent lifetimes without the ability to have service technicians doing maintenance.

[slg]

Their viability is what I called physics-defying. Without some drastic changes to our current level of technology, the added costs of putting something in space along with the complexities of powering, cooling, and maintaining it once it's there is just too much to overcome the alternative of just building it on Earth.

[dgoldstein0]

Cooling.

Radiative cooling is the only option, and it basically sucks vs any option you could use on earth.

Second, ai chips have a fixed economic life beyond which you want to replace them with better chips because the cost of running them starts to outpaxe the profit they can generate. This is probably like 2-3 years but the math of doing this in space may be very different. But you can't upgrade space based data centers nearly as easily as a terrestrial data center.

[dgoldstein0]

More details from a guy who has thought this through https://taranis.ie/datacenters-in-space-are-a-terrible-horri...

[boutell]

How do you cool them? Getting rid of heat is one of the number one challenges on the ISS.

[overfeed]

Without evaporation and convection, getting rid of heat is a bitch in space.

[anjel]

Which is why he's the GOPs bank now

[CGMthrowaway]

What are they hiding that wasn't hidden already? Two private companies making a private transaction.. there is no mandatory reporting now nor after this move

[rubyn00bie]

Because X and xAI are both losing money. X needed cash to operate, so Elon rolled it into xAI to use xAI’s cash to help fund it. xAI is likely burning egregious amounts money, but will have trouble raising more capital. By rolling it into SpaceX he further covers up the financial issues because SpaceX is actually profitable. He can then raise more capital without having to worry (for a while) about how awful the burn is…

I, by and large, have a strong dislike of Musk to put it mildly. The one thing I will give him, and I think this is his real gift, is he’s absolutely brilliant when it comes to raising capital. He has proven to excel at raising capital, and deploying it well, for extremely capital intensive businesses. I do however wonder if the chickens are coming home to roost because both X and xAI are extremely unprofitable.

I think it’s almost inevitable we will see Space X and Tesla merge. The conditions of that merger will, I believe, say a lot about whether this move was brilliant or batshit.

[selectodude]

SpaceX investors want to cash out, which is why they’re going public. Elon Musk wants to dump his X/xAI bags onto the public markets by merging it with SpaceX.

Essentially means that SpaceX investors are bailing out Elon Musk.

[khannn]

Don't forget that a lot of US mil stuff is launched by SpaceX so in a very real way they are the prime defense contractor in space for the country. If the public offering doesn't work, Unc Sam'll bail them out. Wonder if Trump will want a stake in the company this time.

[quantified]

Parent poster may have been thinking of other readers. I see it as you do, but it's a fair question.

[Fogest]

But that is also just an assumption isn't it? Could this not also be related to the fact that they plan to launch a ton of servers into the sky to run in space and power AI? It would mean that their AI product would become heavily based on the services provided by SpaceX via launching all this.

But regardless, I think quotes like these should have some commentary around them as it helps create a discussion around whatever point they might be trying to make rather than having to make assumptions.

[overfeed]

> Could this not also be related to the fact that they plan to launch a ton of servers into the sky to run in space and power AI

FWIW, SpaceX launched a Tesla roadster into space without first having to merge with Tesla.

[Fogest]

That's a very disingenuous argument and you know it. Starlink is under SpaceX. Do you also think that is wrong then too? They are effectively doing the same kind of thing.

[overfeed]

> Starlink is under SpaceX

Kuiper is not under Blue Origin, and there are no whispers of Amazon and BO merging. You're the one being disingenuous in suggesting that companies have to be merged to buy services from - or cooperate with - each other.

[Fogest]

That's not what I said. Please stop using these kinds of disingenuous attacks.

[overfeed]

Being combative and wrong would be an unfortunate combination. Combative, wrong and ignoring counterexamples that disprove your assertions and hurling ad hominems puts you firmly in troll territory. Good day.

[nerdponx]

Data centers in space have never been a thing and never will be.

[Fogest]

Low orbit satellites providing internet across the world also weren't a thing... until they were.

[decimalenough]

The biggest problem with satellite internet was the costs involved, which SpaceX has pretty much solved.

Datacenters in space, on the other hand, are a terrible idea because of the laws of physics, which will not get "solved" anytime soon. But don't take it from me, listen to this guy with a PhD in space electronics who worked at NASA and Google:

https://taranis.ie/datacenters-in-space-are-a-terrible-horri...

[Fogest]

Check the authors history. They are both anti AI and anti Elon. I think I feel a lot more confident staying optimistic and assuming that the SpaceX and xAI team have done their research about this. I know a lot of people are heavily biased in this matter due to politically not liking Elon or not liking AI, but I also think it's fair to say these companies have many very smart individuals working for them. If they have come to the conclusion that this is viable, then I have much more faith in what they are saying over one guys opinion who is biased against them and saying it's a bad idea.

You're also passing these judgements without knowing their full plan. Maybe we only know one part of the plan and maybe other details have not been announced. They may have a much bigger plan for this than just the specific information we have.

[benzible]

Having previously criticized someone doesn't make your technical analysis biased. It just means you noticed similar problems previously. Conversely, "I used to support him so I'm not biased" is given unearned credibility when really it just means you were late to noticing the obvious.

[sleepybrett]

It doesn't matter what their perceived, by you, biases are. WHAT ARE YOU GOING TO DO WITH ALL THAT HEAT?

[wookmaster]

Why would they launch data servers into space? What purpose would that serve?

[spiderfarmer]

It’s hopium for his investors. Just like his robots.

[mapontosevenths]

Is it financial engineering or social engineering?

He's all over the Epstein files and his daughter has publicly verified that the timing works out and the emails are probably legitimate.

https://www.threads.com/@vivllainous/post/DUMBh2Vkk8D/im-jus...

[irjustin]

At these scales, financial and social are very intertwined, it's both.

[willmadden]

What are you talking about? They are both private companies. They don't have public financial reporting.

[sleepybrett]

didn't tesla just 'invest' 2bills in xai?

[senectus1]

yeah, I am not a huge fan of Musk, but this move is just going to bring down arguably the only decent thing he's produced.

Leave SpaceX alone you child. Gwynne has it in excellent hands.. find some other way to pay for your juvenile brainfarts.

[tialaramex]

Although I'm sure SpaceX would be a non-trivial loss, the most important idea - their truly reusable rocket -- is proven to the point where other people are assuming they should do that to make rockets, it's like if Benz' company goes bankrupt in 1899. In that universe the Mercedes probably never happens but the automobile idea is already a done deal.

[fluoridation]

What do you mean? SpaceX didn't invent the reusable rocket, and my understanding is that Falcon 9 is still not significantly more economical than disposable rockets, and that the main reason it's attractive is that it's not Soyuz-2.

[rogerrogerr]

Your understanding is wrong; see page 2 of https://ntrs.nasa.gov/api/citations/20200001093/downloads/20.... That’s a log plot!

The backing table is on page 8. Falcon 9 is (was, in 2018! It’s only cheaper now.) at $2700/kg to LEO. No one else is below $4k, except… Falcon Heavy.

[andsoitis]

> SpaceX didn't invent the reusable rocket

There isn’t a single inventor and reusable rockets emerged through decades of research.

But: SpaceX was the first to make orbital-class reuse routine and economically viable.

[ghc]

I found that surprising, so I looked on Wikipedia.

Soyuz-2 capacity to LEO: 8,600KG

Falcon 9 capacity to LEO: 22,800KG when expended, 17,500KG when not.

Soyuz-2 Cost to Launch: $35 Million

New Falcon 9 Cost to Launch: $70 Million

Used Falcon 9 Cost to Launch: $50 Million (cost to SpaceX: ~$25 Million)

Soyuz-2 cost per KG: $4000 (data from 2018)

New Falcon 9 cost per KG: $964 when expended, $1250 when not.

Use Falcon 9 coster per KG to Customer: $893 when expended, $690 when not

So realistically, Falcon 9 is roughly 20-30% the price per KG when new, and dropping to a minimum of 17.25% of the price when used.

Plus you get a larger diameter payload fairing and the ability to launch a payload up to 4X the size.

I'm pretty sure that even used as an expendable rocket, 1/4 the price per KG (if you need the capacity) is a pretty significant improvement. Now I understand why satellite ride-shares are so popular!

[rogerrogerr]

Plus, the Falcon launch cadence is infinitely better than Soyuz 2. 2025:

Soyuz-2: 12 launches

Falcon 9: 165!

[jasonwatkinspdx]

Space is basically half the cost of it's competitors on a per kg basis. And while previous experiments like the DC-X existed, SpaceX absolutely gets credit for the first operational reusable rocket stage.

And I say that as someone that despises Elon and the way he casts his companies as due to his personal technical genius.

[fluoridation]

>And while previous experiments like the DC-X existed, SpaceX absolutely gets credit for the first operational reusable rocket stage.

Not true. What about STS?

[jasonwatkinspdx]

Eh that's a spaceplane and solid rocket booster shells which I see as categorically different, and an absurd failure on a cost per kg basis.

[saalweachter]

I think we're around stage 4 of:

  1.  Elon is a genius, a real world Tony Stark.
  2.  How dare you!  You're just jealous!
  3.  Ok, regardless, he's done more to advance EVe and space travel than anyone else alive.
  4.  Oh God, he's going to cripple US development of EVs and rockets, isn't he?
  5.  Eh, Mars was never happening in my lifetime anyway.

[woooooo]

I think he's genuinely changed for the worse, quite a lot, in the last 10 years. Staring down failure seemed to keep the worst tendencies in check, being untouchable amplified them.

[leesec]

>arguably the only decent thing he's produced.

such a hilarious comment / mindset. he made the best selling car in the world 3 years running. neuralink is a great breakthrough. there are a string of accomplishments which individually would be the greatest thing many many people have ever done.

[scubbo]

> he made the best selling car in the world 3 years running

Not only did Elon not found Tesla[0], but many employees have described the "babysitters" or "handlers" who are responsible for making him feel like his ideas have been implemented, so that his caprice and bluster don't interfere with the actual operation of the company.

To give him his due, he's a phenomenal manipulator of public opinion and image, and he certainly has invested a lot of his emerald-generated wealth into numerous successful ventures - but he himself is not a positive contributor to their success.

[0] https://autoworldjournal.com/is-elon-musk-the-founder-of-tes...

[mlindner]

Trying to make a point out of whether he did or didn't found Tesla kind if defeats the rest of your post. He paid over 90% of the first funding round and brought in key people like JB Straubel. When the company was basically an incorporation paper and no assets. Under most companies people would have argued for founder/co-founder status at that point. So yes he didn't "found" Tesla but for all intents and purposes he basically did.

[Fogest]

I mean, even if he isn't directly making a lot of the decisions in these companies that are doing well, it doesn't mean he doesn't play a big role in that still. He still had to pick a lot of these leaders, pay them well, keep them satisfied enough to stay there, and also give them the proper freedom to lead these companies. There are many people out there who could also manage to make these companies fail instead of grow.

I feel that a lot of people simply don't like Elon because of political reasons which are often also based on misinformed opinions. It also can't be denied that he is an intelligent person. You can hear it when he talks in interviews.

Now I think ultimately any ultra wealthy person is going to have some flaws that people can find and latch onto in order to hate someone.

[scubbo]

> It also can't be denied that he is an intelligent person. You can hear it when he talks in interviews.

While I certainly won't deny that I do strongly disagree with all of Elon's politics, I'm being as fair and unbiased as I can when I say - we must be listening to different interviews. The man sounds like a caricature of a bumbling college stoner philosophy student most of the time.

[leesec]

truly a braindead argument. probably paid for by a shortseller.

[kens]

I was shocked to learn recently how China is crushing it in renewables and electric cars. BYD sold 600,000 more electric cars than Tesla in 2025, becoming the world's largest EV brand. Tesla's sales have been declining since 2023, while BYD sales are rapidly growing, so the gap is likely to get even larger in 2026. This is an important trend, regardless of how one feels about Musk.

Sources: https://www.science.org/doi/10.1126/science.aee8001 https://www.statista.com/chart/33709/tesla-byd-electric-vehi...

[Rover222]

It's really disturbing how confidently blinded you are by whatever political biases you have.

[reverius42]

So reveal the unbiased truth to us please -- what's the real motivation for consolidating these companies?

[Rover222]

It's uhhh... clearly explained in the linked announcement.

[bko]

Hiding losses? From whom? He's the majority shareholder of both businesses. The combined company will go public and report on things like revenue, burn rate, etc. It's not financial engineering. It's a purchase.

Just say "rocket man bad" and save some keystrokes.

[axus]

Maybe he likes the xAI minority investors more than the SpaceX investors? Or he needs their support for something else.

I agree we'll have to keep digging (or reading other comments, at least) to find a better explanation.

[deaux]

> Just say "rocket man bad" and save some keystrokes.

Hey Jeff, on what day is the wildest party on your island?