Don’t let Elon Musk monopolize space compute

Last week, Elon Musk announced plans to merge xAI and SpaceX, a move that did not attract much political attention despite the intense levels of interest in arguing about both antitrust policy and Elon Musk.

At the same time, SpaceX has begun the process of securing F.C.C. approval for a plan to put orbital data centers into outer space.

I think one reason this hasn’t attracted a ton of attention is that the idea of putting data centers in outer space sounds kind of fantastical. Another is that progressive politics has become strongly associated with A.I. skepticism, so the idea that you’re going to build a vibrant business by launching data centers into space and there may be an antitrust issue with this doesn’t quite scan with the right people.

But we should take the economic possibilities of A.I. seriously.

And while I’m kind of skeptical about the space-data-centers idea as a short-term play, plenty of people in the industry think it’s worth taking a hard look at. There are some big problems with space as a location for data centers, but also some real upsides.

As a result, this merger poses the very real risk that the combined company will be able to leverage a dominant market position in the space launch industry into a dominant market position in A.I. If nothing else, that is clearly what Musk wants to achieve with this merger.

That is bad in a classic antitrust sense. It’s good for the United States and the world to have a competitive A.I. market, one where OpenAI and Anthropic and Google and Meta and others are robustly competing at the frontier. The potential for A.I. in space is real, and allowing a single company to monopolize that would be a big mistake.

By the same token, while antitrust issues have become a factional wedge in the Democratic Party, I think it would make more sense to target regulatory activism at evil right-wing billionaires rather than maintain an exclusive focus on antagonizing Democratic donors.

All of which is to say, an xAI / SpaceX merger ought to be prohibited.

Beyond the fact that Musk is the founder of both companies, the only rationale for merging them would be an anticompetitive one. But beyond that (or if it ends up