Elon Musk's SpaceX has shown investors a prototype of a "handset-like" AI device, reportedly sleeker than an iPhone and built to run a proprietary operating system with technology from xAI, The Wall Street Journal reported, citing people familiar with the demonstrations.
The device was shown to investors and stakeholders before SpaceX went public. Sources said the design is at an early stage and could still change. Musk has denied the reporting, calling it "utterly false" on X.
SpaceX and sister company Tesla possess the manufacturing infrastructure and chip access to mass-produce AI hardware. The company has signalled it wants to expand into wireless through Starlink Mobile, positioning it as a potential competitor to Verizon and AT&T. One analyst speculated that T-Mobile or AT&T could become acquisition targets.
The move puts SpaceX in direct competition with OpenAI, which is collaborating with former Apple design chief Jony Ive on an AI device that CEO Sam Altman claims will be "more peaceful than an iPhone." OpenAI recently hired Paul Meade, Apple's former Vision Pro vice president, to bolster its hardware division.
The AI hardware graveyard is already crowded — Humane and Rabbit both launched devices that consumers largely ignored. Whether SpaceX can succeed where others failed may depend less on the hardware and more on whether Starlink Mobile and xAI together create an ecosystem compelling enough to make the device feel essential rather than optional.
Analysis
Musk and Altman racing to build AI-first consumer hardware isn't coincidence — it's platform war. Both see the smartphone as a gatekeeper they don't control (Apple's iOS, Google's Android). SpaceX has what Humane and Rabbit lacked: a satellite network for connectivity and manufacturing at scale. If Starlink Mobile becomes the pipe and xAI the brain, the device isn't the product — it's the on-ramp. The real bet is that AI interfaces make today's app-grid home screens look as dated as rotary dials. Whoever owns the new surface owns the next decade of distribution.
