SpaceXAI plans Wednesday launch of first AI model built with Cursor, as Musk rebrands xAI

Rebranding to SpaceXAI

On July 6, the xAI account on X posted "We are now @SpaceXAI", marking the official rebranding of Elon Musk's AI venture. The move consolidates AI operations under the SpaceX umbrella, following the acquisition of xAI by SpaceX in February 2026. The new name applies only to the AI branch; SpaceX will retain its name for rocket launches and space contracts. The x.ai website now displays the SpaceXAI branding, though formal legal updates are still pending.

Model launch with Cursor

SpaceXAI plans to launch its first jointly developed AI model with Cursor as early as Wednesday, according to a staff memo reported by The Information. The launch was pushed back from earlier this week to improve efficiency. The model is being compared internally to Anthropic's Claude Opus 4.8 and OpenAI's GPT 5.5. Cursor founder Michael Truell had previously teased a model that would compete with frontier systems, calling it the "next phase of the company."

This is the next phase of the company.

Orbital data center ambitions

The merger is driven by Musk's vision of moving AI compute to space. SpaceX has requested FCC permission to deploy up to one million satellites to serve as orbital data centers, aiming to reduce energy costs by using solar power. Musk has argued that terrestrial electricity supply cannot meet AI's demands.

Global electricity demand for AI simply cannot be met with terrestrial solutions. Moving data centers to space is the only logical solution.

No orbital data center has been launched yet, and challenges like heat dissipation and hardware maintenance remain unsolved. Musk estimated that space-based compute could become cheaper than terrestrial within two to three years.

Financial context

The rebranding follows a series of financial milestones. SpaceX acquired xAI in February 2026 in an all-stock deal valuing the combined entity at $1.25 trillion. In June, SpaceX went public in the largest IPO in history, raising $75 billion at a $1.77 trillion valuation. The company's total addressable market is estimated at $28.5 trillion, with $26.5 trillion from AI alone. SpaceXAI already has lucrative compute contracts: Anthropic pays $1.25 billion monthly and Google pays $920 million monthly for access to its Colossus data centers.