Space
SpaceX wins NASA contract to launch Earth Observing System, but current administration has other plans
SpaceX recently snagged an $80.4 million NASA contract to launch an upcoming Earth-observing satellite sometime in 2022. That is, if the mission isn’t scrapped due to budgetary issues.
A used Falcon 9 rocket is slated to ferry the 3,748-lb. (1,700 kg) Plankton, Aerosol, Cloud, and ocean Ecosystem satellite (aka PACE) to orbit sometime in December 2022. The mission, which provides data on oceans and particles in the atmosphere, is expected to launch from Cape Canaveral Air Force Station in Florida.
Its goal: to help us better understand our home planet. SpaceX is expanding its portfolio, after receiving certification for science launches in 2016. To date, SpaceX launched a bevy of scientific satellites including Jason-3 in 2106, the Transiting Exoplanet Survey Satellite (TESS) and GRACE-FO missions in 2018, and the upcoming Sentinel 6A in Nov. 2020.
But it’s been a tough journey for PACE. The satellite has been on the chopping block several times, but managed to avoid getting the ax so far.
That’s because the Trump administration has tried to cancel the ocean-watching mission three separate times now, in an effort to reduce the Earth science budget. Each time the president has tried to cut its funding, Congress voted to support it, including authorizing $131 million for the mission in December 2019.
So NASA has moved ahead with the development of the mission, and selected SpaceX as the launch provider on Feb. 4.
“SpaceX is honored to continue supporting NASA’s critical scientific observational missions by launching PACE, which will help humanity better understand, protect and preserve our planet,” Gwynne Shotwell, SpaceX’s president and chief operating officer, said in a company statement.
PACE will focus on our planet’s oceans, the clouds, and aerosols (small air particles) in an effort to better understand phytoplankton — tiny plant-like organisms in the ocean that are the base of the food chain. These organisms can tell us a lot about how climate change is affecting the environment.
“PACE will help scientists investigate the diversity of organisms fueling marine food webs and the U.S. economy, and deliver advanced data products to reduce uncertainties in global climate models and improve our interdisciplinary understanding of the Earth system,” NASA said in a statement.
“It will also continue systematic records of key atmospheric variables associated with air quality and Earth’s climate,” officials wrote on the PACE mission’s website.
Like most plants, phytoplankton relies on chlorophyll to capture sunlight, and then using photosynthesis to turn it into chemical energy, releasing oxygen as a byproduct.
Phytoplankton are a diverse variety of species and their growth depends on the availability of things like carbon dioxide, sunlight, and nutrients. Just like their terrestrial counterparts, phytoplankton require can nutrients such as nitrate, phosphate, silicate, and calcium, depending on the species.
Other factors that influence growth rates are water temperature and salinity, water depth, wind, as well as what sort of predators are nearby.
When conditions are just right, phytoplankton populations can grow explosively, a phenomenon we call a bloom. Blooms in the ocean may cover hundreds of square kilometers and are easily spotted in satellite imagery. A bloom may last several weeks, although the life expectancy of any individual organism is rarely more than a few days.
Phytoplankton are important because they are the foundation of the aquatic food web, feeding many different creatures from other microscopic organisms to enormous, mega-ton whales.
Phytoplankton aren’t always a good thing — certain species are known to produce powerful biotoxins, like the red tide. These toxic blooms can kill marine life and ultimately people if they accidentally eat contaminated seafood or by inhaling the organisms.
PACE’s primary tool is called the Ocean Color Instrument (OCI). It will measure the color of the ocean in a broad range of wavelengths, from ultraviolet to shortwave infrared, according to NASA. The satellite will observe the Earth from an orbital perch about 420 miles (675 kilometers) above the planet. (For reference, the space station orbits at 250 miles or 400 km up.)
“The color of the ocean is determined by the interaction of sunlight with substances or particles present in seawater, such as chlorophyll, a green pigment found in most phytoplankton species,” according to the mission’s website. “By monitoring global phytoplankton distribution and abundance with unprecedented detail, the OCI will help us to better understand the complex systems that drive ocean ecology.”
PACE will be in a sun-synchronous orbit, which will allow for consistent daylight conditions for imaging. This makes it easier for scientists to compare different regions and the same regions over long periods of time — if the satellite makes it to orbit.
Today, the president released his budget request for 2021, and once again, PACE is one of two Earth science missions he wants to cancel. Will its luck hold out? Will Congress vote to approve funding for the vital satellite despite the president’s suggestion? Only time will tell.
But with many coastal states recently suffering from red tide, this satellite will be a valuable tool in scientists’ arsenal to help them better understand these tiny organisms.
Despite many recent rumors and various reports, Elon Musk confirmed today that SpaceX is not developing a phone based on Starlink, not once, but twice.
Today’s report from Reuters cited people familiar with the matter and stated internal discussions have seen SpaceX executives mulling the idea of building a mobile device that would connect directly to the Starlink satellite constellation.
Musk did state in late January that SpaceX developing a phone was “not out of the question at some point.” However, He also said it would have to be a major difference from current phones, and would be optimized “purely for running max performance/watt neural nets.”
Not out of the question at some point. It would be a very different device than current phones. Optimized purely for running max performance/watt neural nets.
— Elon Musk (@elonmusk) January 30, 2026
While Musk said it was not out of the question “at some point,” that does not mean it is currently a project SpaceX is working on. The CEO reaffirmed this point twice on X this afternoon.
Musk said, “Reuters lies relentlessly,” in one post. In the next, he explicitly stated, “We are not developing a phone.”
Reuters lies relentlessly
— Elon Musk (@elonmusk) February 5, 2026
We are not developing a phone
— Elon Musk (@elonmusk) February 5, 2026
Musk has basically always maintained that SpaceX has too many things going on, denying that a phone would be in the realm of upcoming projects. There are too many things in the works for Musk’s space exploration company, most notably the recent merger with xAI.
SpaceX officially acquires xAI, merging rockets with AI expertise
A Starlink phone would be an excellent idea, especially considering that SpaceX operates 9,500 satellites, serving over 9 million users worldwide. 650 of those satellites are dedicated to the company’s direct-to-device initiative, which provides cellular coverage on a global scale.
Nevertheless, there is the potential that the Starlink phone eventually become a project SpaceX works on. However, it is not currently in the scope of what the company needs to develop, so things are more focused on that as of right now.
With the news of a merger between SpaceX and xAI being confirmed earlier this week by CEO Elon Musk directly, the first moves of an umbrella company that combines all of the serial tech entrepreneur’s companies have been established.
The move aims to combine SpaceX’s prowess in launches with xAI’s expanding vision in artificial intelligence, as Musk has detailed the need for space-based data centers that will require massive amounts of energy to operate.
It has always been in the plans to bring Musk’s companies together under one umbrella.
“My companies are, surprisingly in some ways, trending toward convergence,” Musk said in November. With SpaceX and xAI moving together, many are questioning when Tesla will be next. Analysts believe it is a no-brainer.
SpaceX officially acquires xAI, merging rockets with AI expertise
Dan Ives of Wedbush wrote in a note earlier this week that there is a “growing chance” Tesla could be merged in some form with the new conglomeration over the next 12 to 18 months.
“In our view, there is a growing chance that Tesla will eventually be merged in some form into SpaceX/xAI over time. The viewis this growing AI ecosystem will focus on Space and Earth together… and Musk will look to combine forces,” Ives said.
Let’s take a look at the potential.
The Case for Synergies – Building the Ultimate AI Ecosystem
A triple merger would create a unified “Musk Trinity,” blending Tesla’s physical AI with Robotaxi, Optimus, and Full Self-Driving, SpaceX’s orbital infrastructure through Starlink and potential space-based computer, and xAI’s advanced models, including Grok.
This could accelerate real-world AI applications, more specifically, ones like using satellite networks for global autonomy, or even powering massive training through solar-optimized orbital data centers.
The FCC welcomes and now seeks comment on the SpaceX application for Orbital Data Centers.
The proposed system would serve as a first step towards becoming a Kardashev II-level civilization and serve other purposes, according to the applicant. pic.twitter.com/TDnUPuz9w7
— Brendan Carr (@BrendanCarrFCC) February 4, 2026
This would position the entity, which could ultimately be labeled “X,” as a leader in multiplanetary AI-native tech.
It would impact every level of Musk’s AI-based vision for the future, from passenger use to complex AI training models.
Financial and Structural Incentives — and Risks
xAI’s high cash burn rate is now backed by SpaceX’s massive valuation boost, and Tesla joining the merger would help the company gain access to private funding channels, avoiding dilution in a public-heavy structure.
The deal makes sense from a capital standpoint, as it is an advantage for each company in its own specific way, addressing specific needs.
Because xAI is spending money at an accelerating rate due to its massive compute needs, SpaceX provides a bit of a “lifeline” by redirecting its growing cash flows toward AI ambitions without the need for constant external fundraising.
Additionally, Tesla’s recent $2 billion investment in xAI also ties in, as its own heavy CapEx for Dojo supercomputers, Robotaxis, and Optimus could potentially be streamlined.
Musk’s stake in Tesla and SpaceX, after the xAI merger, is also uneven. His ownership in Tesla equates to about 13 percent, only increasing as he achieves each tranche of his most recent compensation package. Meanwhile, he owns about 43 percent of the private SpaceX.
A triple merger between the three companies could boost his ownership in the combined entity to around 26 percent. This would give Musk what he wants: stronger voting power and alignment across his ventures.
It could also be a potential facilitator in private-to-public transitions, as a reverse merger structure to take SpaceX public indirectly via Tesla could be used. This avoids any IPO scrutiny while accessing the public markets’ liquidity.
Timeline and Triggers for a Public Announcement
As previously mentioned, Ives believes a 12-18 month timeline is realistic, fueled by Musk’s repeated hints at convergence between his three companies. Additionally, the recent xAI investment by Tesla only points toward the increased potential for a conglomeration.
Of course, there is speculation that the merger could happen in the shorter term, before June 30 of this year, which is a legitimate possibility. While this possibility exists but remains at low probability, especially when driven by rapid AI/space momentum, longer horizons, like 2027 or later, allow for key milestones like Tesla’s Robotaxi rollout and Cybercab ramp-up, Optimus scaling, or regulatory clarity under a favorable administration.
Credit: Grok Imagine
The sequencing matters: SpaceX-xAI merger as “step one” toward a unified stack, with a potential SpaceX IPO setting a valuation benchmark before any Tesla tie-up.
Full triple convergence could follow if synergies prove out.
Prediction markets are also a reasonable thing to look at, just to get an idea of where people are putting their money. Polymarket, for example, sits at between a 12 and 24 percent chance that a Tesla-SpaceX merger is officially announced before June 30, 2026.
Looking Ahead
The SpaceX-xAI merger is not your typical corporate shuffle. Instead, it’s the clearest signal yet that Musk is architecting a unified “Muskonomy” where AI, space infrastructure, and real-world robotics converge to solve humanity’s biggest challenges.
Yet the path is fraught with execution risks that could turn this visionary upside into a major value trap. Valuation mismatches remain at the forefront of this skepticism: Tesla’s public multiples are unlike any company ever, with many believing they are “stretched.” On the other hand, SpaceX-xAI’s private “marked-to-muth” pricing hinges on unproven synergies and lofty projects, especially orbital data centers and all of the things Musk and Co. will have to figure out along the way.
Ultimately, the entire thing relies on a high-conviction bet on Musk’s ability to execute at scale. The bullish case is transformative: a vertically integrated AI-space-robotics giant accelerates humanity toward abundance and multi-planetary civilization faster than any siloed company could.
In a groundbreaking new report from Reuters, SpaceX is reportedly discussing merger possibilities with xAI ahead of the space exploration company’s plans to IPO later this year, in what would be a blockbuster move.
The outlet said it would combine rockets and Starlink satellites, as well as the X social media platform and AI project Grok under one roof. The report cites “a person briefed on the matter and two recent company filings seen by Reuters.”
Musk, nor SpaceX or xAI, have commented on the report, so, as of now, it is unconfirmed.
With that being said, the proposed merger would bring shares of xAI in exchange for shares of SpaceX. Both companies were registered in Nevada to expedite the transaction, according to the report.
On January 21, both entities were registered in Nevada. The report continues:
“One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company’s chief financial officer, as managing members, while the other lists Johnsen as the company’s only officer, the filings show.”
The source also stated that some xAI executives could be given the option to receive cash in lieu of SpaceX stock. No agreement has been reached, nothing has been signed, and the timing and structure, as well as other important details, have not been finalized.
SpaceX is valued at $800 billion and is the most valuable privately held company, while xAI is valued at $230 billion as of November. SpaceX could be going public later this year, as Musk has said as recently as December that the company would offer its stock publicly.
The plans could help move along plans for large-scale data centers in space, something Musk has discussed on several occasions over the past few months.
At the World Economic Forum last week, Musk said:
“It’s a no-brainer for building solar-powered AI data centers in space, because as I mentioned, it’s also very cold in space. The net effect is that the lowest cost place to put AI will be space and that will be true within two to three years, three at the latest.”
He also said on X that “the most important thing in the next 3-4 years is data centers in space.”
If the report is true and the two companies end up coming together, it would not be the first time Musk’s companies have ended up coming together. He used Tesla stock to purchase SolarCity back in 2016. Last year, X became part of xAI in a share swap.
Tesla adds a new feature to Navigation in preparation for a new vehicle
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
