Every rocket test and engineering project that aerospace giant SpaceX (SPCX) has completed since 2002 may now be used as AI training material. That is what makes its merger with xAI far more interesting than a simple consolidation between two Elon Musk companies. Indeed, Grok 4.7 is now receiving additional training with a large amount of SpaceX data, according to Musk, while Grok 5 is expected to use the company's full historical data set. If that works as intended, SpaceX could give Grok an engineering education that competitors such as OpenAI and Anthropic cannot recreate on their own.

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Why the SpaceX-xAI Merger Makes Sense

For context, SpaceX completed its acquisition of xAI on February 2, which brought the X social platform and large AI computing systems under the same corporate roof as Starlink and SpaceX's launch business. The deal offers several practical advantages. For instance, SpaceX can use its own computing infrastructure to train Grok, while its engineering operations can supply specialized data.

In addition, Starlink could eventually connect AI systems around the world, and SpaceX's rockets could help place AI computing systems in orbit as early as 2028. The merger also gives the expensive xAI business access to SpaceX's financial resources. Indeed, SpaceX spent $15.8 billion on AI capital expenditures in Q2 alone while its AI segment generated only $2.56 billion of revenue.

Grok May Become Exceptionally Capable at Engineering Tasks

Nevertheless, the most valuable asset may be SpaceX's data. Musk said on the company's August 4 earnings call that Grok 5 should arrive before year-end and will incorporate "the entire corpus of SpaceX data," which he described as roughly a quarter-century of information. He believes that this could make Grok exceptionally capable at engineering tasks.

However, when it comes to OpenAI and Anthropic, while they can obtain engineering data from many sources and work with industrial partners, they cannot independently recreate SpaceX's private record of rocket developments, satellite systems, factories, and real-world operations. Especially since there aren't many rocket makers to begin with, and it's unlikely that the few that do exist will want to give that data to train AI models that can be used by competitors.

This is especially important because AI models are becoming easier for well-funded companies to match on computing power. Proprietary data is what makes the difference. Still, the company warns that xAI integration remains complex and that the commercial value of frontier AI is not guaranteed.

Is SPCX Stock a Good Buy?

Overall, Wall Street analysts have a Moderate Buy consensus rating on SPCX stock based on 24 Buys, five Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPCX price target of $232.35 per share implies 77.4% upside potential. (See SPCX Stock Forecast).