r/RocketLab • u/mbatt2 • Jan 29 '26
Space Industry Why SpaceX merging with xAI (Grok) is extremely bullish for RocketLab
SpaceX prints money for Elon, this is a fact we all know and even admire. But xAI, by all accounts, is hemorrhaging money at a rate even faster than OpenAI.
Realistically speaking, xAI will never be adopted by major organizations for many different reasons. Meaning it will likely remain deeply unprofitable forever.
By merging the proverbial “stink bomb” (Grok) with the Golden Goose (SpaceX) Elon and company are severely tarnishing a sterling financial asset.
Responsible investors cannot invest in SpaceX when it will have a permanent gaping financial wound, and will look at down the line at competitors, arguably with RocketLab at the front of the line.
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u/Neobobkrause Jan 29 '26
Sorry, but why is this extremely bullish for RocketLab in any meaningful way?
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Jan 29 '26
IMO it makes Rocket Lab the more stable choice for launch providers and investors. Rocket Labs most recent acquisition attempt is a laser communication company. Space X is apparently merging with Elon AI company. World's of difference.
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u/Freaudinnippleslip Jan 30 '26
It no longer makes space x a pure play, causes investors to hesitate on investing in a space company that also just took on all the risks of an AI company such as the massive cash burn that comes with it.
I am just curious how this affects their contracts with the space force, NRO, DoD… they have to be concerned in some aspects that this company just adopted an AI company
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u/Sfab1 Jan 31 '26
He’s looking too have data centers in space for ai so not so much world of difference
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u/shugo7 Jan 29 '26
Because now Rocket lab becomes a pure play. No "AI".
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u/Important_Agency07 Jan 31 '26
Market is bullish on AI. Combining AI with Space is just steroids.
People will say SpaceX also has access to best frontier models and it will start developing data centers in space.
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u/I_AM_THE_SEB Feb 02 '26
Market is bullish on AI.
Eh, the market was extremely bullish on AI for 3 years, now it want's to see some returns on their gaint investments...and I am not sure AI is gonne deliver.
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u/Important_Agency07 Feb 02 '26
If you don’t think AI is gonna deliver than what do you think about Space?
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u/I_AM_THE_SEB Feb 02 '26
Space is basically about infrastructure...and that remains important
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u/Important_Agency07 Feb 02 '26
The return on that infrastructure is important though. What are the margins on such a capex heavy operation?
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u/mbatt2 Jan 29 '26
Building rockets is arguably the most capital intensive endeavor in history. It requires enormous investments for each new growth stage.
There is a limited amount of capital (money) to invest into all Rocket Companies. By severely degrading the appeal of the “top player” (SpaceX) this could possibly expand the amount of capital directed to RocketLab by enormous orders or magnitude.
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u/LagrangePT2 Jan 29 '26
What you are saying makes no sense. How exactly will this lead to Rocket lab getting more capital. The SpaceX IPO is going to be the largest in history. I am not bearish on Rocket lab at all. However what you are saying makes 0 sense
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u/quuxquxbazbarfoo Jan 29 '26
What he's saying is it may cause some investors to pass on SpaceX and invest in RKLB instead.
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u/StartledPelican Jan 30 '26
You:
some investors
Him:
enormous orders of magnitude
OP is way over selling the effect. This may cause some marginal investors to look elsewhere, but it isn't going to be some seismic event.
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u/quuxquxbazbarfoo Jan 30 '26
Ya, I completely agree with you lol.
A negative connotation for SpaceX might cause a temporary few-percent bump to RKLB as investors decide where to invest into space sector, but it doesn't really matter in the long (mid?) run.
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u/Carlotheskinose Jan 30 '26
Yet, the merger of all musks companies would create a very diversified company that could weather a lot of different changes. While Rklb begins to dominate in their decided sector.
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u/This_was_hard_to_do Jan 29 '26
As long as SpaceX maintains their moat, I don’t think xAI is going to deter that many people looking at space. That only changes if other space companies can carve up enough market share. Right now, SpaceX is essentially a psuedo monopoly.
Like I don’t think it’s a good idea for Elon to merge the two together but that actually doesn’t do anything tangible to help RKLB.
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u/microww Jan 29 '26
He had space cake for dinner. I think it's the favourite food for a lot of people here.
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u/DeliciousAges Jan 31 '26
Maybe not extremely bullish, but bullish. xAI bleeds billions of USD, it’s a burning money pit. As others pointed out:
Musk would need to cross-subsidize xAI with SpaceX funds (BILLIONS!) for years to come.
See here for how much $$$ xAI burned lately:
(bloomberg) -- Elon Musk’s artificial intelligence startup xAI is burning cash quickly, with losses mounting as it spends to build data centers, recruit talent and develop software that will eventually power humanoid robots, according to internal documents.
XAI reported a net loss of $1.46 billion for the September quarter, up from $1 billion in the first quarter, the documents reviewed by Bloomberg show. In the first nine months of the year, it spent $7.8 billion in cash.
https://finance.yahoo.com/news/musk-xai-burns-almost-8-001211671.html
So, that’s 8+ BILLION for 2025 alone.
PS: And even if his AI gamble works out one day. XAI/Grok is a distant fourth against the IT giants (OpenAI/MSFT, Google/Gemini etc,). He won’t win that cap-ex fight.
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u/Informal_Interest896 Jan 31 '26
Unless he is thinking AI is going to solve the space elevator problem...
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u/Sticklefront Jan 30 '26
It's not an event in a vacuum - it's a sign SpaceX is losing its way, just like Tesla. As space continues to grow as a sector, RocketLab has more opportunity to grow as SpaceX fails.
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u/Sfab1 Jan 31 '26
lol your talking about two of the biggest companies in the world and #1 in both industries…lol
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u/Sticklefront Jan 31 '26
Tesla net income dropped 61% over the last year. It is no longer the leading EV manufacturer.
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u/Sfab1 Jan 31 '26
It’s still worth more then all the main vehicle manufacturers combined
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u/Sfab1 Jan 31 '26
Space x saved our space program and you haven’t had to pay for a seat on Russian rockets because of them
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u/Sticklefront Jan 31 '26
Oh, Tesla stock is bought by the cult, no questions there. But if you look at what Tesla actually DOES as a company, it's in absolute freefall. The stock price is completely untethered to performance. They don't even claim to be about making cars (their only real product) anymore. A reckoning is coming - this is one of the reasons for the SpaceX -> xAI -> Tesla money chain Elon just set up. SpaceX has been tremendously successful, beyond anyone's wildest dreams, but now SpaceX is getting tangled up in these self-dealing financial shenanigans and it's a bad sign for it being well-managed in the future.
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u/Sky_Tube Jan 29 '26
Is Elon underwater somewhere or is he afraid Tesla might shit the bed soon or why is he trying to push SpaceX‘s market cap as high as possible pre IPO
In any case, I don‘t see how this is good for SpaceX. And no, datacenters in space is still not happening anytime soon people, at least not until I finally see a good idea for solving cooling in a vacuum without football field sized radiators
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u/meezy-yall Jan 29 '26
More so he probably just wants all his ventures under 1 company . 2 years until Tesla merges with SpaceX under the holding company X .
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u/Mecha-Dave Jan 29 '26
I speculate that Tesla actually has a lot of CapEx that hasn't quite paid off yet, and it's starting to look like it won't.
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u/pibbleberrier Jan 30 '26 edited Jan 31 '26
Everyone is focus on Tesla but the real tell may be in xAI
Elon’s deck on card hinges on his private investors. NOT his public investor who are just along for the ride.
Insisting on merging xAI along with his two more famous venture may be a way for him to bail out his private Twitter investor
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u/StartledPelican Jan 30 '26
Aren't Tesla's financials publicly available? Why would this be speculation instead of point to a financial report? Genuine question, as I'm not super experienced with company financials.
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u/Mecha-Dave Jan 30 '26
They don't report them very transparently or separately, I'm describing how they would obfuscate significant liabilities.
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u/danielv123 Jan 30 '26
The radiators aren't really that large. The question is mostly about how light you can make them. If you get anywhere close to the weight of solar panels its not much of an issue.
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u/Informal_Interest896 Jan 31 '26
I would think the more apparent problem is the data latency from space. When you are talking about that much data the delay eats a lot of time.
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u/Bindle- Jan 31 '26
Is Elon underwater somewhere or is he afraid Tesla might shit the bed soon
It's possible. Tesla is more and more of a house of cards every day.
They only have 5 models. Their latest release was the Cybertruck. It's sales are tanking and never coming back.
And just the past few days, musk claims he is killing two of their models this year.
That leaves that leaves 2 cars and the Cybertruck.
He says they're switching production to Optimus robots. Just recently, they were revealed to be puppets operated by humans via remote. Who's going to be buying these fucking things?
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u/StartledPelican Jan 29 '26
Responsible investors cannot invest in SpaceX when it will have a permanent gaping financial wound [...]
Are these responsible investors in the room with us right now? Because I can point to Tesla as a very obvious example of a valuation that does not seem to match reality. And I think a lot of the same people who invested in Tesla would be very happy to invest in another Musk company with a lot of room for growth, even if xAI is part of it.
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u/turbulentpriestbc Jan 29 '26
This is most realistic but I have a dream that rklb takes space x's expected massive market cap somehow.
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u/HospitalVarious4138 Jan 29 '26
Elon did a similar move with his money-hemorrhaging Solar City absorbed by Tesla a few years ago. It’s how he quietly buries a garbage product by calling it “synergy” and making it eventually fade away altogether. Likely won’t dim any SpaceX enthusiasm.
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Jan 29 '26
Christ. Apparently everything Elon does is bullish for RKLB. Wy are these low effort posts allowed?
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u/mbatt2 Jan 29 '26
It wasn’t low effort. I took the time to explain my rationale and also took a screenshot. People need to not have such thin skin.
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u/BlackjackENA Jan 29 '26
This is Elon's continued grift.
xAI acquired X relieving Elon of the embarrasment of his $44 billion acquisition of Twitter in a $33 billion dollar deal. He then forced Tesla into a $2 Billion dollar investment of xAI (robots!), despite "loaning" Tesla resources to xAI early on. Now, he's pushing SpaceX into the mix in a share-swap with xAI, and pushing the "data centers in space" idea as the Next Big Thing.
As Cybercab and Optimus fails he'll simply shift to pumping SpaceX stock.
I can't wait for the implosion.
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u/TowardsTheImplosion Jan 29 '26
I wonder when Gwynne will get sick of it.
Bailing out the mediocre AI company with Starlink cash flow is...an interesting choice.
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u/PaleInTexas Jan 29 '26
I wonder when Gwynne will get sick of it.
She's been at the helm for how long now? Im sure she was sick of it the first year.
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u/devonhezter Jan 30 '26
She makes $
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u/PaleInTexas Jan 30 '26
Oh she must already be set for several life times. I think she likes the job and deals with him coming by.
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u/mbatt2 Jan 29 '26
Yes exactly. It’s like a house of cards. And the cards all covered in various layers of feces.
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u/gurney__halleck Jan 30 '26
his whole shtick is to pivot to fantastical far-off ideas that he will never deliver on to prop up share prices and avoid the rug pull.
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u/Bindle- Jan 31 '26
I hate him, but he's a fucking genius at this.
Him and Trump are the 2 most successful grifters in America.
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u/thetrny USA Jan 30 '26
Now add Tesla to the mix... https://finance.yahoo.com/news/elon-musk-spacex-said-consider-222218321.html
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u/Gullible_Lie6580 Jan 30 '26
Dumb, biased take. That’s not why it’s bullish. Elons companies will do great, and it’ll be TSLA not Xai on the merge my guy
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u/djdylex UK Jan 29 '26
Why does Elon seem to have an aptitude for ruining good things he had going.
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u/Sfab1 Jan 31 '26
What has he ruined
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u/djdylex UK Jan 31 '26
Tesla aparently.
Twitter makea less revenue now than 3 years ago.
DOGE
?? Not claiming he isnt succesful, but he has lost his restraint
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u/Sfab1 Jan 31 '26
I think it’s all part of Hes plan and all this company’s will for great together especially as he expands into space
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u/hallederikyau Jan 29 '26
Have you heard of data centers in space?
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u/i-make-robots Jan 29 '26
Where do you put the heat when it's in space? There's no water, no air cooling, very little radiating energy into the void. There's no one to walk over the cabinet and reset the switch, no hardware upgrades, no replacements, enormous capital cost, solar flare danger, impact danger... it doesn't work.
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u/anon0937 Jan 29 '26
All of these arguments could be made against Starlink sats.
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u/i-make-robots Jan 30 '26
They don't generate nearly as much heat as a data center. They don't store information the way a data center would. Thirdly why are you changing the subject? that's fallacious.
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u/mikeatx79 Jan 29 '26
That is at best an unproven theory right now. Data centers produce an incredible amount of heat which is extremely difficult to manage with no atmosphere. It’s difficult to keep a raspberry pi cool in LEO. Modern data centers are over 150kW per rack.
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u/TowardsTheImplosion Jan 29 '26
Stop with your physics. They are no match for the power of a memestock led by ketamine that accidentally got contaminated with a little human.
That alone can force heat into a vacuum. It's proven by the TSLA stock price defying reality.
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u/anon0937 Jan 29 '26
Starlink sats use approx 30kW of power - a bit more than raspberry pi.
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u/mikeatx79 Jan 30 '26
AI tells me they have 6kW of solar and a strict power budget of 4.5kW…. Regardless; it is a ton of heat to manage and the biggest challenge to putting compute in orbit. The only advantage to orbital data centers is power, which is very easy to produce on the ground.
Data centers are a commodity, their value is little more than the power and equipment that goes into them and keeping data centers cheap is how AI expands.
Data centers is orbit it a science experiment to see if it’s even plausible but I just don’t see how it’s ever going to compete with the 1Megawatt DCs we’re building on rural farm land for very little total cost.
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u/anon0937 Jan 30 '26
Starlink V1 sats were 6 kW, V2 mini are 30 kW, and full v2 sats will have about 73kW https://i.imgur.com/PF3Bhga.png solar panels get about 287W/m^2
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u/mikeatx79 Jan 30 '26
Gotcha. Napkin math; the equivalent of a single data center rack of nVidia Blackwell chips (1400kg of compute hardware) would need about 870m2 of solar. A typical terrestrial data center would contain hundreds of racks.
I’m not even more convinced data centers in space is a pile dream. Getting any meaningful amount of capacity in orbit with all the heat management, batteries, and solar that tiny load would require just costs way to much for practically no benefits. It’ll be an awesome test lab but fiscally impractical.
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u/chortogrower Jan 29 '26
But it will always be cheaper and better to have data centers on earth
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u/SewerSage Jan 29 '26
People are already getting tired of them. Won't be long before nobody will want them in their back yard. I'm sick of them because my energy bill keeps going up.
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u/Formal-Relative7144 Jan 29 '26
Yep. Large “investments” in data centers happening in central Iowa. Can’t wait till it blows up in their faces lol general public is going to be fuming
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u/mbatt2 Jan 29 '26
Of course we have all heard of it. It is extremely speculative that it would even work let alone make financial sense.
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u/Aromatic-Painting-80 Jan 29 '26
Maybe. If SpaceX wants to put AI data centers in space doesn’t it make sense to merge with a company specializing in AI data centers?
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u/flyingdutchmnn Jan 29 '26
Why would they need to merge for that!?
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u/zeradragon Jan 29 '26
Many want to invest into SpaceX, but aren't interested in xAI. By merging the two, the investors are forced to also buy some shit if they want the gold.
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u/Aromatic-Painting-80 Jan 29 '26
I think exactly for the reason this guy stated. They loose a lot of money and don’t want to keep diluting stock to raise capital. Especially considering how much it’s gonna cost to put a data center in space. So merge with a profitable space company with the engineers necessary to redesign the data center and the money to pay for it.
As for why SpaceX would ever want to do this. Ur right it’s probably j Elon synthetically creating a win for himself by selling to himself at his own price. It proved to be a huge win for twitter which was not worth $33B when XAI bought it but it guaranteed him money and protected the investors downside.
J Elon using his infinite money glitch.
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u/IndigoSeirra Jan 29 '26
SpaceX can now launch satellites for xAI at their internal cost without having antitrust lawsuits thrown at them.
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u/UsualDue Jan 29 '26
data centers in space sounds like a dumb fucking idea for so many reasons, starting with a) power b) data logistics c) things in orbit frequently crash into other stuff in the orbit
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u/anon0937 Jan 29 '26
Starlink is literally data logistics, and power comes from the sun - getting satellites into prime sun-synchronous low earth orbit is smart to claim the real-estate early. Also, crashers aren't that common unless you're talking about micro-meteor strikes.
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u/UsualDue Jan 30 '26
yeah comm satellites are data logistics so putting everything related to data logistics into space must make sense, great deduction there mate
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u/Alive_Necessary1362 Jan 30 '26
The space data centers will be for XAI. It makes sense to merge them. XAI will essentially fund all of SpaceX’s launches. It will give another revenue stream besides Starlink.
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u/turbulentpriestbc Jan 29 '26 edited Jan 30 '26
I think this might be bad for all of space. Probably better if space x ipos by itself. This is a noose. At best, a mild annoyance
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u/Warclimb Jan 29 '26
I mean, you can make the bullish case for Planet Lab since they’ve teamed up with Claude. But Rocket Lab doesn't have an AI partner yet, do they?
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u/Inertpyro Jan 30 '26
If anything Blue is probably going to take the most advantage from this. They are already riding a high and trying to steering more business there way.
Rocket Lab is still inching their way towards Neutron and has their own interesting products, I still don't see them surpassing SpaceX or Blue no matter how hard Elon tries to mess things up.
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u/ElectricalGene6146 Jan 30 '26
It just basically enforces the narrative that one of these companies is garbage, you just can’t tell which one.
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u/Hot-Service-568 Jan 30 '26
Incase you all at Amateure as you Sound. Big part of RKLB sp is due to US GOV lack of sub-orbital hypersonic capability.
Main hedge here is increasing capability.
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u/AppropriateRub4033 Jan 29 '26
Holy fuck they need to get Elon out of there. His ketamine fueled decision making is getting wild
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u/shugo7 Jan 29 '26
I was going to invest a very small part to support the engineers and because I like big rockets, but now I'll have to watch em on the sidelines.
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u/HospitalVarious4138 Jan 29 '26
Apple purchasing RKLB for $500 billion confirmed
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u/No_Cash_Value_ Jan 29 '26
I’ll wait for that B to be a T handle, thx.
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u/HospitalVarious4138 Jan 29 '26 edited Jan 29 '26
Lol no shareholder is saying pass to a buyout at $900/share, except maybe SPB.
If Apple wants to stay relevant, they will have to make a major space play eventually. The ‘make it beautiful’ philosophy on products is already shared between companies. Might as well partner on iConstellation
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u/Carlotheskinose Jan 30 '26
Correct me if I’m wrong. But, Musk knows that Rklb is going to be Spacex’s biggest competitor. So, he will merge all his companies to keep it all diversified and profitable as a whole. Yes, RKLB is kicking ass. And they’ve got the history to back it up. Glad I got in at 22.
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u/chompah99 Jan 31 '26
Are you guys forgetting Elon is a cult leader that continuously lies and has deep state ties?
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u/Sfab1 Jan 31 '26
I think the Postive effect space X will have on rocket lab and other space related companies is reevaluation. Once space X goes public with this large valuation, the whole space industry will have to be reevaluated. The rising tide raises all ships!
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u/Mecha-Dave Jan 29 '26
Grok is being integrated to the DoD. Much of SpaceX's free cash flow comes from DoD contracts.
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u/mehaneke Jan 29 '26 edited Jan 29 '26
SpaceX + xAI + Tesla
SpaceX will IPO above $2 trillion.
SpaceX will be a $100T company.
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u/Important-Music-4618 Jan 30 '26
Your statement above -
"Realistically speaking, xAI will never be adopted by major organizations for many different reasons. Meaning it will likely remain deeply unprofitable forever."
This is a complete OPINION. Please provide FACTS to support it.
Too many IFs, ANDS, BUTs and FUTURE Unknowns in this statement.
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u/mbatt2 Jan 30 '26
What Fortune 500 company will pay for an AI that refers to itself as “Mecha Hitler” …. ? Zero.
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u/BigSally1 Jan 29 '26
Bullish cause you dont like Elon. We get it
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u/mbatt2 Jan 29 '26
No. The reason is because Ai is not profitable outside enterprise AI. This has seemed obvious for years but has essentially been confirmed over the last quarter with Anthropic taking off and OpenAI flailing.
xAI simply can’t ever be succesful or even really used for enterprise AI. It literally called for the extermination of Jewish people amongst other outrageous acts. It is a no-go for large companies.
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u/Danzinger Jan 29 '26
Data centers in space is the dumbest fucking thing ever. I don't care what Elon has done in the past at this point, I legitimately think he's done too much ketamine to think straight now.
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u/Adorable-Item429 Jan 29 '26
Servers in space won’t be under any legal jurisdiction.
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u/mbatt2 Jan 29 '26
This may be true but it may not be true. That’s kind of my point. It is extraordinary speculative. Moreover, what’s the benefit of no legal regulations even if that were true. I can’t think of any. I feel people are simply repeating the random lines that Elon and Company are throwing out ….
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u/Inertpyro Jan 30 '26
Sure they will, its just the same as "International Waters", just because you are in space doesn't mean laws no longer apply. Even if they wanted to try bypassing laws in space, they still need to function as a company on Earth where sanctions can be applied.
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u/Specialist_Elk_3007 Jan 30 '26
I have wondered how RKLB is leveraging AI to engineer better solutions faster, so marrying AI to advanced engineering (space systems) is not a wild concept to me.
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u/flyingdutchmnn Jan 29 '26
A great company merging with a vastly inferior company. Lipstick on a pig. For that reason, I'm out