Elon Musk just told his 234 million followers on X that
SpaceX has already shifted its primary focus from Mars to
building a self throwing city on our nearest neighbor, the Moon.
The company spent 2 decades, 20 years telling all of us, telling
the world that Mars colonization was the entire point of its
existence. And now a Wall Street Journal
report confirmed SpaceX told investors the same thing days
earlier, targeting an uncrewed lunar landing by March.
Now the XAI merger, 1,000,000 satellite filing with the FCC,
and the largest IPO in history are all connected to the single
strategic pivot. So what exactly changed inside
SpaceX to make Musk abandoned the Mars First timeline he
promised as recently as last year?
Now Musk's merger memo to SpaceX employees describe plans for
self growing bases and factories on the moon powered by the same
AI infrastructure that XAI brings into the combined $1.25
trillion entity. And we're going to breakdown why
SpaceX shelved its 2026 uncrewed Mars mission.
How the XAI acquisition feeds directly into the lunar
construction plan. What the FCC filing for
1,000,000 Orbital Data Center satellites actually means for
the company's IPO evaluation and why the race against China to
return humans to the Moon forced Musk to do all of this.
SpaceX has officially abandoned its Mars First strategy in favor
of building a permanent settlement on the Moon within
the next 10 years now. The announcement came just days
after the company completed the largest corporate merger in
history. Observing Musk's AI company XAI
at a combined valuation of 1.25 trillion.
Now these two events are deeply connected.
The financial engineering behind them tells you more than the
press releases actually do. Musk laid out the logic on X in
plane engineering terms. He said Earth and Mars only
align for launch window every 26 months and each trips takes
roughly 6 to 9 months one way. SpaceX can launch to the moon
every 10 days with a 2 day transit time.
That difference gives SpaceX roughly 13 times more iteration
cycles on lunar missions compared to Mars missions in any
given period. For a company that build its
entire culture around rapid prototyping, blowing things up
and rebuilding faster than math alone makes the Moon a far
better near term target. Every failed system on a moon
mission can be redesigned and relaunched within weeks, while a
single Mars failure locks you out for over 2 years.
Musk framed that decision as a question of civilization
security, writing that the overriding priority is securing
the future of civilization and the Moon is just simply faster
to iterate on. The Wall Street Journal reported
on Friday the SpaceX had already communicated this shift to
investors before Musk said it publicly.
Company is now targeting March 2027 for an uncrewed Starship
lunar landing. No people on board.
The mission falls under Spacex's existing NASA contract to
develop a Starship variant, the HLS, capable of faring
astronauts from lunar orbit to the surfaces part of the Artemis
program. Now, NASA's crude Artemis 3
landing is not expected until 2028, more than likely 2029.
And that timeline has already been pushed back multiple times
because Starship just wasn't ready.
NASA Administrator Jared Isaacman has made the urgency
clear, telling employees that the US has a great competitor
moving at impressive speeds. Referring to China, of course.
And no human has walked on the moon since Apollo 17 in 1972.
And both nations, the US and China, are racing to change that
before the end of the decade. President Trump signed an
executive order on space policy late last year pushing for
Americans on the moon by 2028, shifting his own earlier
rhetoric after planting the American flag on Mars before the
end of his term. Now, as recently as last year,
Musk publicly stated he aimed to send an uncrewed mission to Mars
by the end of this year. In September 2025, he predicted
humans would have a settlement on Mars by 2055.
Now, those timelines have now been formally shelved.
SpaceX still plans to pursue Mars, with Musk saying
construction of a Mars city would begin in five to seven
years, but the immediate resources, engineering focus,
and investor narrative have all shifted to the Moon.
For those who have been following Musk's Mars promises
going back to 2011, when he told the Wall Street Journal the
SpaceX astronauts would reach Mars 20 years, this is a
significant recalibration of the Company SCORE mission.
Of course, SpaceX didn't make it in 15 years to Mars, and they're
not going to in 20 years. And the XAI merger plays
directly into this lunar strategy.
SpaceX completed the acquisition on February 3rd, structuring it
as a share exchange that valued SpaceX at a trillion dollars in
XAI. At 250 billion, CIBC confirmed
it is the largest merger of all time.
Musk's own memo described the combined company is a vertically
integrated engine spanning AI rocket space based Internet
direct to mobile communications and the X social media platform.
Now the merger brings XA is Grok AI models, its engineering
talent and its massive compute infrastructure under the same
corporate roof as Starlink's 9000 Plus satellites and
Spacex's reusable rocket fleet. The internal anchor use case
Musk keeps referencing is orbital data centers, solar
powered satellite clusters that would run AI workloads in space
where power and cooling constraints are fundamentally
different from anything on Earth.
Now I've been digging through the analytics of the show.
Notice that 37% of you are following the show.
For you, I'm forever grateful. Of course, the other 60 some odd
percent of you haven't hit the follower subscribe button but
have listened to the show before or have watched the show before.
So I'm just going to give you a little bit extra here.
I've been doing this for about 7 years, 7-8 years.
I'm going to keep doing it for 10 more.
And all I ask from you is a second, one second of your time
to hit the follow or subscribe button on whatever platform
you're listening to on right now.
So thank you so much for that. Without you, I can't continue
doing this. So all I need is your quick
follow or subscribe now. Three days before announcing the
XAI merger, SpaceX filed with the FCC to launch a
constellation of up to 1,000,000 satellites designed to function
as orbital data centers. Satellites could operate between
502,000 kilometers altitude reliant optical inter satellite
links and harness near constant solar power.
And for context, there are currently about 14,500 active
satellites in Earth orbit in 9555.
Of those are Starlink satellites.
SpaceX own filing called the project a first step toward
becoming our Kardashev Type 2 civilization, one that can
harness the sun's full power now.
FCC Chairman Brendan Carr accepted the filing for public
comment within five days. Muscat said he believes the
lowest cost way to generate AI compute will be in space within
two to three years, and then within five years SpaceX will
launch and operate more AI compute in orbit then the entire
rest of the world produces on the ground.
Now, the financial structure behind all of this is also worth
understanding. SpaceX generated an estimated $8
billion in profit on 15 to $16 billion of revenue in 2025, with
roughly 80% of that revenue coming from launching Starlink
satellites. XAI, by contrast, is burning
approximately a billion dollars per month as it tries to scale.
Now the merger gives XAI kind of a lifeline through Spacex's cash
flow while simultaneously giving SpaceX a higher growth narrative
heading into an IPO. Aligning the merger and the FCC
filing ahead of the IPO is just classic Musk's valuation,
inflation, Spacex's packaging, a narrative of lowest cost AI
compute for space. That's the kind of storyline
that expands total addressable market and lifts growth
multiples. The IPO targeting mid 2026 and
evaluation of 1.5 trillion would be the biggest IPO ever.
I want to be clear about the skepticism here because it's
warranted. I am a fan of SpaceX.
I'm a fan of Elon Musk and what he's done for the industries
that he's part of. The concept of orbital data
centers faces real engineering challenges, and Musk's timeline
doesn't actually address radiation exposure.
Extreme temperature swings between -240 and 300°F in low
Earth orbit, the impossibility of physically servicing failed
GP OS during long training runs, and latency constraints all
remain unsolved at scale. It would take many years before
anything substantive happens, and that a lot of things need to
go right for it to work at a scale relevant to terrestrial
alternatives. Now this merger of XAI and
SpaceX carries an internal risk. Former XAI staffer on the human
data team wrote publicly that XA is flat hierarchy and move fast
and break things. Culture will collide with
Spacex's more structured engineering processes,
predicting culture shock for XAI employees.
Wedbush on the other hand, sees a growing chance that Tesla will
eventually be folded into SpaceX and XAI entity over the next 12
to 18 months, creating a unified ecosystem connecting electric
vehicles, autonomous driving, humanoid robots, orbital
infrastructure and AI models under a single corporate
structure in SpaceX. Well, they officially shifted
from a Mars first company to Moon first company.
Still pretty cool. Backed by the largest merger in
corporate history. 1,000,000 satellite, FCC filing and an IPO
that could value the combined entity at $1.5 trillion.
Some of that money may go towards acquiring Tesla, and
Musk still says Mars is coming in five to seven years.
But the money, the engineering focus, and the investor pitch
are all pointed at the Moon in an orbital AI infrastructure in
the race against China to return humans to the lunar surface,
combined with the practical math of 10 day launch cadences versus
26 month planetary alignments is why they did this.
And whether the orbital data center vision is real
engineering or a pre IPO talk. Inflation will become clear soon
enough. But for now, SpaceX is betting
its future on our closest terrestrial neighbor, the Moon.