With co-founders leaving and an IPO looming, Elon Musk turns talk to the moon

On Tuesday evening, Elon Musk gathered the xAI employees for an all-hands meeting. Apparently he wanted to talk about the future of his AI company, and specifically how it relates to the moon.

The New York Times reports this heard the meetingMusk told employees that xAI needs a lunar production facility, a factory on the moon that will build AI satellites and throw them into space via a giant catapult. “You have to go to the moon,” he said, according to the Times. This move, he explained, will help xAI leverage more computing power than any rival. “It’s hard to imagine what an intelligence of that magnitude would be thinking about,” he added, “but it will be incredibly exciting to see it happen.”

What Musk didn’t seem to clearly address was how this would all be built, or how he plans to reorganize the newly merged xAI-SpaceX entity that’s simultaneously heading for a potentially historic IPO. He proudly acknowledged that the company is evolving. “If you move faster than anyone else in a given technology arena, you will be the leader,” he told employees, according to the Times, “and xAI moves faster than any other company — no one even comes close.” He added that “when this happens, there are people who are better suited for the early stages of a business and less suited for the later stages.”

It is not clear what prompted all the activists, but the timing, whatever the cause, is curious to say the least. On Monday evening, xAI co-founder Tony Wu announced he was leaving. Less than a day later, another xAI co-founder Jimmy Ba, who reported directly to Musk, said he was also bouncing. That brings the total to six of the twelve founders of xAI who have now left the young company. The splits have all been described as copacetic, and with a SpaceX IPO reportedly set to hit a $1.5 trillion valuation this summer, everyone involved will be doing very well financially on the way out the door.

The moon itself is a more recent concern. For most of SpaceX’s 24-year existence, Mars was the endgame. Last Sunday, just before the Super Bowl, Musk surprised many by posting that SpaceX had “shifted focus to building a self-growing city on the moon,” arguing that a Mars colony would take “20+ years.” The moon, he said, could get there in half the time.

It’s a pretty big change of direction for a company that has never sent a mission to the moon.

Rationally or otherwise, investors seem considerably more enthusiastic about data centers in orbit than about colonies on other planets. (Even for the most patient money out there, that’s a long timeline.) But for at least one investor in xAI who spoke to this editor last year, the moon ambitions have nothing to do with Wall Street and are not a distraction from xAI’s core mission; they are inseparable from it.

The theory, laid out by the VC at the time, is that Musk has been working toward a single goal from the start: the world’s most powerful model of the world, an AI trained not just on text and images, but also on its own real-world data that no competitor can replicate. Tesla contributes to energy systems and road topology. Neuralink provides a window into the brain. SpaceX offers physics and orbital mechanics. The Boring Company adds some subsurface data. Add a moon factory to the mix and you start to see the outlines of something very powerful.

Whether that vision is feasible is a big question. Another question is whether it is legal. Under the 1967 Outer Space Treaty, no country – and by extension no company – can claim sovereignty over the moon. But a 2015 U.S. law opened an important loophole: While you can’t own the moon, you can own everything you get out of it.

As Mary-Jane Rubenstein, a professor of science and technology studies at Wesleyan University, explained to TechCrunch last month, the distinction is somewhat illusory. “It’s more like saying you can’t own the house, but you can have the floorboards and beams,” she said. “Because the stuff that’s in the moon is the moon.”

That legal framework is the foundation on which Musk’s moon ambitions apparently rest, even if not everyone has agreed to abide by those rules (China and Russia certainly haven’t). Meanwhile, the team that has to help him, at least for now, is getting smaller and smaller.