Elon Musk is building a grand narrative for his newly merged business empire that blends space exploration and artificial intelligence, attempting to replace his long-held but unprofitable Mars colonization plan with the vision of "Alpha, the lunar base," as a new attraction for talent and capital.
According to TechCrunch, during the merger and subsequent restructuring of SpaceX and xAI, Musk presented employees with a new blueprint: building cities on the moon and using lunar mass-driven systems to launch AI satellites into deep space. This idea emerged after a wave of high-level departures at xAI, and Musk attempted to use it as a new recruitment strategy to boost market expectations for the potential IPO of the merged company. He stated that to achieve a computing power target exceeding one terawatt per year, it would be necessary to go to the moon and utilize solar energy.
This strategic shift comes at a time when SpaceX publicly abandoned its long-held goal of colonizing Mars. Rather than pursuing a commercially viable Mars program, Musk now favors a science fiction metaphor based on the "Kardashev scale"—capturing solar energy to power large-scale AI models by building extraterrestrial infrastructure. Musk claims the company aims to train and run AI using "a few percent of solar energy," a vision designed to provide the merged entity with a unique value proposition that differentiates it from other AI labs.
For investors, this vision, while highly speculative, logically attempts to combine SpaceX's launch capabilities with xAI's computing power needs. Despite the significant technological and cost barriers to mass-producing supercomputers on the moon, this narrative could potentially propel SpaceX stock to the next Tesla by igniting retail investor enthusiasm, while simultaneously offering new technical challenges to engineers weary of traditional large-scale language model development.
Strategic Focus Shift: From Mars to the Moon AI Center
Musk's new vision was revealed at the end of a briefing at the xAI all-hands conference, a segment where he typically presents renderings of a Mars landing and discusses the future of humanity across multiple planets. However, this time the focus shifted to a lunar base. After outlining plans to establish an AI data center in Earth orbit, Musk further proposed that to overcome computing power bottlenecks, a journey into deep space is necessary. He envisioned using a large magnetic levitation train (i.e., a mass drive) to project a lunar-built space computer into the solar system.
This shift didn't come out of nowhere. TechCrunch points out that SpaceX had previously publicly withdrawn from its Mars colonization goals. Back in 2017, due to technical challenges and high costs, SpaceX abandoned its plan to convert the Dragon spacecraft into a Mars lander. The capabilities of its core launch vehicle, Starship, have also been scaled back, focusing instead on two more profitable short-term missions: launching Starlink communications satellites and executing NASA's $4 billion manned lunar landing contract.
In contrast, the Mars project lacks a clear payer, while the lunar base can more closely serve the current logic of expanding AI computing power.
Recruitment and the reshaping of narrative tools
Over the past nine years, Mars colonization has been an extremely effective recruitment tool and brand moat for SpaceX.
The "Conquer Mars" slogan not only united internal employees but also set SpaceX apart from many contractors content with government contracts. Now, with xAI incorporated into the corporate empire, Musk needs a new narrative to integrate rocket manufacturing with the artificial intelligence business. A former senior executive once complained that "all AI labs are doing the exact same thing, which is boring," while "mass-producing solar system-sized supercomputers on the moon" clearly breaks this homogenization.
Musk's use of the Kardashev scale—a theory that measures a civilization's energy utilization level—provides a theoretical framework for this vision. He argues that early civilizations utilize planetary resources, while advanced civilizations build space infrastructure to capture stellar energy. This grand science fiction narrative aims to reignite engineers' passion and imbue xAI with a sense of mission that transcends that of a traditional software company.
Business Logic and Market Response
While the idea of building a lunar base may seem distant, there is a certain business logic behind it. Experts point out that with the surging demand and rising costs of data centers on Earth, establishing data centers in Earth orbit may be feasible in the 2030s. SpaceX's acquisition of xAI and its use of space assets to build data centers may be a bet on the spatialization of future computing infrastructure.
However, establishing a "self-sufficient city" on the moon to produce tons of advanced computers requires a significant reduction in the cost of accessing space and a solution to the problem of transporting raw materials. This vision is currently viewed more as an "extended goal."
For the market, if this narrative resonates with retail investors, it could drive up the valuation of the merged company. As TechCrunch analyzed, this is an attempt to transform SpaceX stock into the next market hotspot, while also providing a unique differentiator for an AI company that might otherwise be known only for its large language models.
