Elon Musk has merged his aerospace company SpaceX with artificial intelligence firm xAI in a deal valuing the combined business at $1.25tn. The move brings together rockets, satellites, AI technology and digital platforms as SpaceX prepares for a public listing later this year.
Under the agreement, SpaceX acquires xAI, including its Grok chatbot and the social media platform X. The merger values SpaceX at about $1tn and xAI at roughly $250bn, creating what would become the world’s most valuable private company ahead of a planned stock market float.
The companies said the deal supports Musk’s long-term vision of developing space-based data centres powered by solar energy to meet the growing demands of artificial intelligence. According to the statement, relying solely on Earth-based data centres would strain global power supplies and infrastructure, making space-based solutions essential for future AI growth.
The merger continues Musk’s strategy of tightly integrating his businesses. Earlier this year, xAI acquired X in an all-stock transaction, and Tesla disclosed plans to invest $2bn in the AI company. SpaceX’s expanding satellite launch business and government contracts have also driven its rapid rise in valuation.
Despite controversy surrounding xAI’s products, the company has attracted significant investor interest during the AI boom, reinforcing the strategic and financial rationale behind the merger.
