Ahead of a blockbuster IPO planned for later this year, SpaceX is in talks to merge with Musk's AI company, xAI, a deal first reported by Reuters on Thursday.
SpaceX, already the world's most valuable private company, could reach a value of more than $US1 ($A1.4) trillion after the IPO.
Starlink updated its Global Privacy Policy on January 15, according to the Starlink website.
The policy includes new details stating that unless a user opts out, Starlink data may be used "to train our machine learning or artificial intelligence models" and could be shared with the company's service providers and "third-party collaborators", without providing further details.
A previous version of the privacy policy, an archived version from November and reviewed by Reuters, did not contain language about AI training on Starlink data.
SpaceX did not respond to a request for comment.
Starlink collects vast amounts of user data, spanning location information, credit card information, contact information and user IP addresses.
It also collects so-called communication data, which includes audio and visual information, data in shared files, and "inferences we may make from other personal information we collect," according to its global privacy policy.
The policy did not make clear exactly what data would be used to train AI.
The move has raised concerns among privacy advocates and consumer rights groups, which argue that using personal data to train AI risks expanding surveillance and creates new avenues for misuse.
"It certainly raises my eyebrow and would make me concerned if I was a Starlink user," said Anupam Chander, a technology law professor at Georgetown University.
"Often there's perfectly legitimate uses of your data, but it doesn't have a clear limit to what kind of uses it will be put to."
Musk's xAI, most recently valued at $US230 billion ($A329 billion) after a recent funding round, is currently developing its Grok LLM chatbot and also owns X, the social media platform.
The potential merger with xAI would turbocharge the space company's deployment of AI-powered services, while giving xAI vast new data sets to train its models on, including communication data.
Starlink, a network of more than 9000 satellites, currently provides internet connection to more than nine million users.
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