SpaceX Considers Acquiring Struggling Startup's Data to Train Grok

TradingKey - According to Bloomberg, people familiar with the matter said SpaceX (SPCX) has internally discussed purchasing customer data and operational information from distressed or defunct startups to acquire data resources at lower costs and boost the performance of its artificial intelligence models.

People familiar with the matter said the discussions were initiated internally by the team at SpaceXAI (formerly xAI), the company's artificial intelligence division, and were informal exchanges that may not ultimately lead to a deal.

This approach is similar to Google's strategy. Following the operational shutdown of budget carrier Spirit Airlines, Google offered $10 million to purchase its operational data for AI training, a bid that subsequently raised privacy concerns, including objections from former flight attendants.

For SpaceX, acquiring external datasets represents a shift in data strategy. Previously, SpaceXAI primarily relied on data from Elon Musk's social platform X and an internal team known as "AI Tutors" to train and optimize models. The company still uses this internal tutor team to help enhance the models' specialized capabilities in finance, science, and even humor, but the team has recently experienced attrition and strategic adjustments.

As of press time, SpaceX was up about 2%, touching $156 early in the session to hit a record high since early July.

SpaceX stock price chart, Source: TradingView

According to an earlier Bloomberg report, the company had paused hiring for AI tutor positions and replaced the team leader, with Jack Garabedian, a veteran from the Starlink business, taking over from young engineer Diego Pasini. People familiar with the matter said that after taking charge, Garabedian set out to establish processes, regular meetings, and clearer data targets to alleviate internal dissatisfaction within the team.

An internal briefing showed that the data team outlined some of its progress in July, including advancements in new AI models and coding agents, stating that these achievements relied on daily labeling, preference alignment, and validation work.

While considering bringing in more external data, SpaceXAI continues to use internal information from Musk's ecosystem, including data generated by employees. Musk recently told SpaceX employees during an internal meeting that Grok will be trained on "the sum of all SpaceX information," adding, "It will use you to train as well."

SpaceX is currently stepping up its AI investments in an effort to catch up with Anthropic and OpenAI in the model race and win over more enterprise customers. However, purchasing data from distressed companies involves complex issues such as data ownership, licensing chains, bankruptcy proceedings, and privacy compliance, for which no established standard practice exists. Discussions remain in early stages, with no specific targets, amounts, or transaction arrangements disclosed.