Elon Musk is making a bold move that could redefine the future of AI and space exploration—or could it be a risky distraction? With key co-founders exiting and a massive IPO on the horizon, Musk is now setting his sights on the moon, and it’s raising more questions than answers.
On a Tuesday evening, Musk convened an all-hands meeting with xAI employees, where he unveiled a vision that sounds straight out of science fiction. According to The New York Times, which reportedly listened in on the meeting [https://www.nytimes.com/2026/02/10/technology/elon-musk-lunar-factory.html?partner=slack&smid=sl-share], Musk declared that xAI needs a lunar manufacturing facility. Yes, you read that right—a factory on the moon. The purpose? To build AI satellites and launch them into space using a giant catapult. ‘You have to go to the moon,’ Musk insisted, adding that this move would give xAI unparalleled computing power. ‘It’s difficult to imagine what an intelligence of that scale would think about,’ he mused, ‘but it’s going to be incredibly exciting to see it happen.’
But here’s where it gets controversial: Musk didn’t elaborate on how this lunar factory would be built or how he plans to manage the newly merged xAI-SpaceX entity, which is barreling toward a potentially historic IPO [https://techcrunch.com/2026/02/02/elon-musk-spacex-acquires-xai-data-centers-space-merger/]. Instead, he proudly acknowledged the company’s chaotic state. ‘If you’re moving faster than anyone else in any given technology arena, you will be the leader,’ he told employees. ‘And xAI is moving faster than any other company—no one’s even close.’ He also hinted at the recent departures of key team members, noting that some people are better suited for a company’s early stages than its later phases.
The timing of this announcement is curious, to say the least. Just a day before, two of xAI’s co-founders, Tony Wu and Jimmy Ba, announced their departures [https://techcrunch.com/2026/02/10/nearly-half-of-xais-founding-team-has-now-left-the-company/]. This brings the total to six out of the 12 founding members who have left the company. While these exits have been described as amicable, they come as SpaceX’s IPO looms, reportedly targeting a staggering $1.5 trillion valuation [https://techcrunch.com/2026/01/30/spacexs-ipo-could-open-the-floodgates-and-secondaries-are-booming-in-the-meantime/]. Financially, those leaving are set to walk away with substantial gains.
And this is the part most people miss: Musk’s pivot to the moon marks a significant shift for SpaceX, which has long focused on Mars as its ultimate goal. Just days ago, Musk announced that SpaceX is now prioritizing a ‘self-growing city on the Moon,’ claiming it could be achieved in half the time it would take to establish a Mars colony. This is a dramatic change in direction for a company that has never even attempted a lunar mission.
Investors seem more enthused about orbital data centers than distant planetary colonies—a more immediate return on investment, perhaps. But according to a venture capitalist who spoke with this editor last year, Musk’s lunar ambitions aren’t a distraction; they’re central to his vision. The theory? Musk is building the world’s most powerful AI model, trained on proprietary data from his various companies—Tesla’s energy systems, Neuralink’s brain insights, SpaceX’s orbital mechanics, and even The Boring Company’s subsurface data. Add a moon factory to the mix, and you’ve got the foundation for something truly revolutionary.
But is this vision even achievable? And more importantly, is it legal? The 1967 Outer Space Treaty prohibits nations—and by extension, companies—from claiming sovereignty over the moon. However, a 2015 U.S. law allows ownership of resources extracted from it. As space ethicist Mary-Jane Rubenstein pointed out to TechCrunch [https://techcrunch.com/2026/01/17/who-gets-to-inherit-the-stars-a-space-ethicist-on-what-were-not-talking-about/], this distinction is murky at best. ‘It’s like saying you can’t own the house, but you can have the floorboards and the beams,’ she explained. ‘Because the stuff that is in the moon is the moon.’
Musk’s ambitions rest on this legal framework, though not all global players—China and Russia, for instance—are playing by the same rules. Meanwhile, the team tasked with realizing this vision continues to shrink. Is Musk’s moon factory a genius leap forward or a risky gamble? What do you think? Let’s discuss in the comments.
Connie Loizos has been covering Silicon Valley since the late ’90s, starting with the original Red Herring magazine. Formerly the Silicon Valley Editor of TechCrunch, she was named Editor in Chief and General Manager in September 2023. She’s also the founder of StrictlyVC, acquired by Yahoo in August 2023 and now a TechCrunch sub-brand. Reach her at connie@strictlyvc.com, connie@techcrunch.com, or via Signal at ConnieLoizos.53. View Bio
