FTC Fast-Tracks Musk's Acquisition of Mesh Optical Technologies
The U.S. Federal Trade Commission (FTC) has granted antitrust clearance for Elon Musk's acquisition of optical networking startup Mesh Optical Technologies, according to a recently disclosed FTC filing. The quick review indicates the agency determined the deal does not raise competition concerns, removing a major regulatory obstacle. However, whether the transaction has been signed or closed remains undisclosed. Given Musk's extensive portfolio spanning Tesla, SpaceX, xAI, and X, any cross-sector acquisition draws heightened scrutiny. The FTC's rapid approval is seen as a reflection of Mesh's niche positioning in the optical interconnect market for AI data centers—a segment still relatively small but growing fast.
Mesh Optical: Space-Grade Optical Communication from Former SpaceX Engineers
Mesh was founded by former SpaceX engineers who previously worked on the laser communication systems for the Starlink satellite constellation. The company's core product is optical transceivers designed for AI data centers, offering significant improvements in energy efficiency, latency, and reliability compared to traditional network hardware. Mesh's technology is built to meet the massive optical connection demands (millions of links) required by scaling AI compute clusters. The team also plans to deploy its optical communication technology in space, targeting intersatellite laser links for orbital data centers and AI satellite networks. In February, Mesh raised over $50 million in a funding round led by Thrive Capital, signaling strong investor confidence in its approach.
SpaceX's AI Compute Strategy: From Gigawatt Clusters to Chip Manufacturing Vertical Integration
The acquisition of Mesh is part of SpaceX's broader strategy to strengthen its large-scale compute cluster competitiveness. SpaceX has elevated AI compute as a core business unit through its subsidiary xAI, which currently operates two training clusters—Colossus and Colossus II—with a combined capacity of approximately 1GW, making it the first company to deploy a contiguous gigawatt-scale AI training infrastructure. Colossus II is scheduled to add over 400MW of compute power and more than 220,000 GB300 chips. xAI has already signed compute agreements with Anthropic, Google, and Reflection AI, positioning itself as a direct competitor to hyperscalers like AWS, Microsoft Azure, and Google Cloud. Furthermore, SpaceX has partnered with Tesla and Intel on the Terafab chip manufacturing initiative, extending vertical integration into chip design and fabrication. These moves demonstrate Musk's vision of building a self-contained AI infrastructure ecosystem—from silicon to optical interconnects to massive clusters—independent of traditional cloud providers.
Despite these ambitious plans, the market has reacted with caution. SpaceX shares, which had been on an upward trend, ended the past week at $153.23, down over 32% from their all-time high of $225.64. Analysts attribute the decline to concerns about the heavy capital expenditure required for these projects, intensifying competition in the AI compute market, and broader macroeconomic headwinds. While the acquisition of Mesh and the expansion of Colossus clusters represent strong long-term bets, investors appear to be pricing in near-term uncertainties. The future trajectory of SpaceX's stock will likely depend on how quickly the company can integrate Mesh's optical technology into its clusters and whether xAI can secure enough revenue from its compute agreements to justify the massive investments.