Musk's "New Pie": Lunar Base

Elon Musk is building a grand narrative for his newly merged business empire that integrates space exploration and artificial intelligence, attempting to replace his long-held but difficult-to-monetize Mars colonization plan with the vision of "Lunar Base Alpha" as a new attraction for talent and capital.

According to TechCrunch, during 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 Moon to launch AI satellites into deep space. This idea was proposed 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 the potential IPO of the merged company. He stated, to achieve the goal of exceeding one terawatt of computing power annually, it is necessary to go to the Moon and utilize solar energy.

This strategic shift comes as SpaceX publicly abandons its long-held Mars colonization goals. Compared to the Mars plan, which struggles to secure commercial funding, Musk is now leaning towards a science fiction metaphor based on the "Kardashev Scale," which involves capturing solar energy through the construction of extraterrestrial infrastructure to power large-scale AI models. Musk claims that the company aims to utilize "a fraction of solar energy" to train and run AI, with this vision intended to provide a unique value proposition for the merged entity that distinguishes it from other AI laboratories.

For investors, this vision, while highly speculative, logically attempts to combine SpaceX's launch capabilities with xAI's computing power needs. Although large-scale production of supercomputers on the Moon faces significant technical and cost barriers, this narrative may seek to ignite retail investor enthusiasm, attempting to position SpaceX's stock as the next Tesla, while also providing new technical challenges for engineers weary of traditional large language model development.

Strategic Shift: From Mars to Lunar AI Hub

Musk's new vision was revealed at the end of a presentation during an all-hands meeting at xAI, which is typically when he showcases renderings of Mars landings and discusses a multi-planetary human future. However, this time the focus shifted to the lunar base. After outlining plans to establish AI data centers in Earth orbit, Musk further proposed that to break through the computing power bottleneck, it is necessary to venture into deep space. He envisions projecting space computers manufactured on the Moon into the solar system using large maglev trains (i.e., mass drivers).

This shift was not without warning. TechCrunch noted that SpaceX had previously publicly withdrawn from its Mars colonization goals. As early as 2017, due to technical challenges and excessive costs, SpaceX abandoned plans to modify the Dragon spacecraft into a Mars lander. The capabilities of its core launch vehicle, Starship, have also been scaled back, focusing instead on two more profitable short-term missions: launching Starlink communication satellites and executing NASA's $4 billion crewed lunar landing contractIn contrast, the Mars project lacks a clear payer, while the lunar base can more closely serve the current logic of AI computing power expansion.

Reshaping Recruitment and Narrative Tools

Over the past nine years, Mars colonization has been an extremely effective recruitment tool and brand moat for SpaceX.

The slogan "Occupy Mars" not only united internal employees but also helped SpaceX stand out among many contractors satisfied with government contracts. Now, with xAI incorporated into the corporate landscape, Musk needs a new narrative to integrate rocket manufacturing with artificial intelligence business. A departing executive once complained that "all AI labs are doing exactly the same thing, which is boring," while "mass-producing solar system-level supercomputers on the moon" clearly breaks this homogenization.

The "Kardashev Scale" cited by Musk—a theoretical measure of a civilization's energy utilization level—provides a theoretical framework for this vision. He believes that early civilizations utilize planetary resources, while advanced civilizations build space infrastructure to capture stellar energy. This grand sci-fi narrative aims to reignite engineers' enthusiasm and give xAI a sense of mission beyond that of traditional software companies.

Business Logic and Market Response

Although the idea of building a lunar base seems distant, there is a certain business logic behind it. Experts point out that with the surge in demand for data centers on Earth and rising costs, establishing data centers in Earth orbit may become feasible in the 2030s. SpaceX's acquisition of xAI and the construction of data centers using space assets may be betting on the spatialization of future computing power infrastructure.

However, establishing a "self-sufficient city" on the moon to produce tons of advanced computers requires a significant reduction in the cost of entering space and the resolution of raw material transportation issues. This vision is currently viewed more as an "extended goal."

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