Jeff Bezos’ Blue Origin announced a new high-capacity backbone network of thousands of satellites. Getty Images Building data centers in space remains a risky proposition, especially with AI investment evolving so rapidly and often unpredictably. Analysts and some industry executives have questioned whether the envisioned cuts in energy consumption are worth the added costs of tailoring those systems for space. Folding xAI into SpaceX could boost the company’s footing for major defense contracts at the Pentagon, which has sought to ramp up AI adoption in its military networks, said Caleb Henry of space research and advisory firm Quilty Analytics. Defense Secretary Pete Hegseth earlier this month visited SpaceX’s Starbase development site in Texas, where he said xAI’s language model and its chat platform Grok will be integrated into military networks as part of the Pentagon’s “AI acceleration strategy,” aimed at speeding up the military’s decision-making and planning. xAI has a contract worth as much as $200 million to provide Grok products to the Pentagon. Starlink and its national security variant Starshield already rely heavily on artificial intelligence, such as for automated satellite maneuvers in orbit. Starshield, under a contract with a US intelligence agency, is building a network of hundreds of classified satellites equipped with different sensors that are expected to use AI to help track moving targets on Earth. SpaceX’s Starbase development site in Texas, where he said xAI’s language model and its chat platform Grok will be integrated into military networks. AFP via Getty Images