Musk's "new big promise": Moon base

Elon Musk is building a grand narrative for his newly merged business empire, integrating space exploration with artificial intelligence. He is attempting to use the vision of “Lunar Base Alpha” to replace his long-standing but hard-to-commercialize Mars colonization plans, positioning it as a new magnet for attracting talent and capital.

According to TechCrunch, in the merger and subsequent restructuring of SpaceX and xAI, Musk presented this new blueprint to employees: establishing cities on the moon and using mass drivers on the lunar surface to launch AI satellites into deep space. This vision was put forward after a wave of executive departures at xAI, with Musk attempting to use it as a new recruitment strategy and to boost market expectations for a potential IPO after the merger. He stated that to achieve the goal of surpassing one terawatt of compute power per year, it is necessary to go to the moon and utilize solar energy.

This strategic shift comes as SpaceX publicly abandons its long-held goal of Mars colonization. Compared to the Mars project, which struggles to secure commercial funding, Musk now favors a science fiction metaphor based on the “Kardashev Index,” building extraterrestrial infrastructure to capture solar energy for powering large-scale AI models. Musk claims that the company could use "a few percent of solar energy" to train and run AI, a vision intended to provide the merged entity with a unique value proposition distinct from other AI labs.

For investors, this vision is highly speculative but logically tries to combine SpaceX’s launch capabilities with xAI’s computing needs. Although mass production of supercomputers on the moon faces immense technical and cost barriers, this narrative could ignite enthusiasm among retail investors, aiming to turn SpaceX’s stock into the next Tesla, while offering engineers tired of traditional large language model development a fresh technical challenge.

Strategic Focus Shift: From Mars to Lunar AI Center

Musk’s new vision was revealed at the end of xAI’s all-hands presentation—a slot usually reserved for Mars landing renderings and talk about the future of multi-planetary humanity. However, this time the spotlight was on the lunar base. After outlining plans to build AI data centers in Earth orbit, Musk further proposed that to break through computing power bottlenecks, deep space was essential. He envisioned using large maglev trains (i.e., mass drivers) to project lunar-manufactured space computers into the solar system.

This shift was not entirely unforeseen. TechCrunch notes that SpaceX had previously publicly backed away from the Mars colonization goal. As early as 2017, due to technical challenges and excessive costs, SpaceX abandoned plans to retrofit the Dragon spacecraft for Mars landing. The core rocket Starship’s capabilities have also been reduced, refocusing on two more profitable short-term missions: launching Starlink communication satellites and fulfilling NASA’s $4 billion crewed lunar landing contract.

In contrast, the Mars plan lacks clear payers, while the lunar base can more closely serve the current expansion logic of AI computing power.

Recruitment and Narrative Tool Redesign

For the past nine years, Mars colonization has been a highly effective recruitment tool and brand moat for SpaceX.

The “Occupy Mars” slogan not only united internal staff, but also helped SpaceX stand out among contractors content with government contracts. Now, as xAI is integrated into the corporate portfolio, Musk needs a new narrative to merge rocket manufacturing with artificial intelligence operations. A departed executive once complained that “all AI labs are doing exactly the same thing, it’s boring,” but “mass-producing solar system-class supercomputers on the moon” clearly breaks this homogeneity.

Musk’s referenced “Kardashev Index”—a theory measuring a civilization’s level of energy utilization—provides the theoretical foundation for this vision. He believes that early civilizations use planetary resources, whereas advanced civilizations build space infrastructure to capture stellar energy. This grand science fiction narrative aims to rekindle engineers’ passion and give xAI a sense of mission beyond a conventional software company.

Business Logic and Market Response

Although the idea of building a lunar base seems distant, there is some business logic behind it. Experts point out that with skyrocketing demand and rising costs for earthly data centers, establishing data centers in Earth orbit during the 2030s may be feasible. The acquisition of xAI by SpaceX and the use of space assets to build data centers may be a bet on spatializing future computing infrastructure.

However, building a “self-sustaining city” on the moon to produce tons of advanced computers requires that the cost of space access must drop sharply and the issue of raw material transport must be solved. For now, this vision is seen more as an “extended goal.”

For the market, if this narrative can be accepted by retail investors, it could raise the valuation of the merged company. As TechCrunch analyzes, this is an attempt to turn SpaceX stock into the next market hotspot, while providing a unique differentiation label for an AI company that might otherwise only be known for large language models.

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