Elon Musk’s rocket and satellite companies SpaceX is to take his Getting started with AI Xai, the Centillionaire Announced on Monday. in a blog postMusk said the acquisition was necessary because the global electricity demand for AI cannot be met by “terrestrial solutions,” and Silicon Valley will soon need to build data centers in space to power its AI ambitions.

“In the long term, space-based AI is clearly the only way to scale,” Musk wrote. “So the only logical solution is to bring these resource-intensive efforts to a location with massive power and space. I mean, space is called ‘space’ for a reason.”

The deal, which combines two of Musk’s biggest private businesses, values ​​the combined entity at $1.25 trillion, making it the world’s most valuable private company, according to a report from Bloomberg.

SpaceX is in the process of preparing to go public later this year before announcing the acquisition of xAI. The space firm’s plans for an initial public offering are still underway, according to Bloomberg.

In December, SpaceX told employees it would buy insider shares in a deal that would value the rocket company. $800 billionaccording to The New York Times. Last month, xAI announced that it was raising $20 billion from investors, bringing the company’s valuation to nearly $230 billion.

This is not the first time Musk has sought to combine parts of his vast business empire, which is largely privately held and includes xAI, SpaceX, the brain interface company Neuralink, and the tunnel transportation company Boring Company.

Last year, xAI Obtained Musk’s social media platform X, formerly known as Twitter, in a deal that values ​​the combined entity at more than $110 billion. Since then, xAI’s core product, Grok, has become increasingly integrated with the social media platform. Grok is featured prominently in various X features, and Musk claims that the app’s content recommendation algorithm is powered by xAI technology.

A decade later, Musk also used shares of his electric car company Tesla to buy SolarCity, a renewable energy company run at the time by cousin Lyndon Rive.

The acquisition of xAI shows how Musk can use his vast network of companies to help power his own often grandiose visions of the future. Elon Musk said in a blog post that SpaceX will focus immediately on launching satellites into space to drive AI development on Earth, but in the long run, space-based data centers that he envisions could power civilizations on other planets, such as Mars.

“This marks not only the next chapter, but the next book of SpaceX and xAI’s mission: scaling to create a sentient sun to understand the Universe and extend the light of consciousness to the stars,” Musk said in the blog post.