SpaceX Discusses Buying Data for AI Models From Failed Startups

(Bloomberg) -- Elon Musk's SpaceX has held internal discussions about buying customer and operational information from troubled or defunct startups, according to people familiar with the matter, targeting a more affordable data source to improve its artificial intelligence models.

The approach would mirror Google's offer to purchase business data from Spirit Airlines for AI training purposes after the discount carrier wound down operations. The Alphabet Inc. company's $10 million bid sparked some data privacy concerns, including from former flight attendants.

The talks within teams inside SpaceXAI, the company's AI unit, are informal and may not result in a deal, said the people, who spoke on condition of anonymity as the information is not public. SpaceX did not respond to a request for comment.

Musk's space, satellite communications and artificial intelligence conglomerate is locked in a heated battle to build more advanced AI offerings that rival the likes of Anthropic PBC and OpenAI as it works to sign up more business customers. Like other AI companies, SpaceXAI, formerly known as xAI, is focused on securing high-quality data sources that can be used to boost the performance of its models on various tasks. The firm is targeting operational data and customer information to train Grok, among other sets, some of the people said.

The strategy of using external datasets marks a departure of sorts for SpaceXAI, which has previously relied on data from Musk's social network, X, as well as a fleet of in-house specialists known as AI tutors to train and refine its artificial intelligence software.

SpaceXAI is still using its internal tutors to help engineers make AI systems better at specialized skills such as finance, science and even humor, but the team has gone through a series of exits and strategy changes. SpaceXAI paused hiring for AI tutors, Bloomberg News reported in June, and later swapped leadership.

Jack Garabedian, a staffer that had spent years working at SpaceX's Starlink satellite-internet service, recently took over the team, replacing college-aged engineer Diego Pasini, Bloomberg previously reported. Since then, Garabedian has worked to quell discontent on the team, establishing processes and meetings as well as clear goals for AI training data, said the people.