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SpaceX has finalized the acquisition of artificial intelligence startup xAI in a historic merger valuing the entity at $1.25 trillion, cementing its status as the world’s most valuable private company. Announced on February 3, 2026, the deal aims to deploy space-based data centers to circumvent terrestrial power and cooling limitations, marking a significant pivot in Elon Musk's operational strategy across his portfolio.
Key Developments
- Historic Merger: SpaceX acquires xAI to develop orbital compute infrastructure, creating a $1.25 trillion private juggernaut.
- Executive Shakeup: PayPal replaces CEO Alex Chris with Enrique Lores following an 18% stock plunge and missed Q4 revenue targets.
- Legal Escalation: Paris prosecutors, supported by Interpol, raided X offices regarding algorithmic manipulation and generative AI content charges.
- Product Pivots: Adobe announces the discontinuation of Animate, while Mozilla introduces a global "kill switch" for AI features in Firefox.
SpaceX Bets on Orbital Compute
The acquisition of xAI by SpaceX represents a convergence of aerospace logistics and high-performance computing. The merger's primary objective is to construct space-based data centers, a theoretical solution to the escalating energy and thermal management crises facing ground-based AI server farms. By moving compute infrastructure to orbit, the combined entity plans to leverage solar energy and the vacuum of space for cooling.
However, industry analysts note the potential friction in uniting these distinct operational cultures. SpaceX has traditionally focused capital on Starship development and launch cadence, while xAI requires massive liquidity to compete with terrestrial AI leaders. The deal is expected to generate revenue through the manufacturing and launch of new satellite constellations required to support this orbital network.
Regulatory Pressures and Legal Challenges
Regulatory scrutiny on Elon Musk’s companies has intensified in Europe. Paris prosecutors, aided by cybercrime units and Interpol, executed a raid on the offices of X (formerly Twitter). The investigation, which initially focused on algorithmic data distortion, has expanded to include serious charges related to the "fraudulent extraction of data" and the possession of illicit imagery generated by the platform's Grok AI model in late 2025.
"The raid was conducted by cyber crime units with Interpol support and prosecutors have summoned Elon Musk and Linda Yaccarino for interviews on April 20th, 2026."
Concurrently, European nations are tightening digital restrictions for minors. Spain and Greece have proposed banning social media access for teenagers under 16 and 15, respectively. This aligns with similar legislative moves in Britain, France, and Australia, reflecting a global consensus to treat social platforms as potential hazards to adolescent mental health.
Corporate Strategy and Consumer Pushback
The tech sector is seeing a divergence in how companies integrate—or retreat from—artificial intelligence. PayPal announced an immediate leadership change, appointing former HP executive Enrique Lores as CEO to replace Alex Chris. The board cited a "lack of alignment" regarding the company's performance after Q4 results disappointed investors.
In the creative software market, Adobe has sparked community outrage by announcing the discontinuation of its 2D animation software, Adobe Animate, effective March 1, 2026. The company intends to shift focus entirely to AI-driven technologies, advising users to migrate to After Effects or Express—a move many professionals find inadequate.
Conversely, Mozilla is capitalizing on "AI fatigue." The upcoming Firefox 148 update will feature a global kill switch, allowing users to disable all generative AI integrations. This decision mirrors similar privacy-focused features from competitors like Vivaldi, catering to a user base increasingly skeptical of forced AI integration in productivity tools.
Hardware Milestones
In the gaming sector, the original Nintendo Switch has officially surpassed the Nintendo DS to become the company's best-selling console ever, with 155.37 million units sold as of the end of 2025. Despite the launch of the Switch 2, the legacy console continues to sell, now tracking to beat the PlayStation 2's all-time record of over 160 million units.
Looking ahead, the industry will be watching April 20, 2026, when X executives are scheduled to face prosecutors in Paris, a confrontation that could set new precedents for platform liability regarding AI-generated content.
