SpaceX Merger with xAI Ahead of Major IPO
SpaceX has acquired artificial intelligence company xAI in a $1.25 trillion merger that consolidates Elon Musk's business empire as the aerospace company prepares for a public offering later this year. The two companies announced the deal on Monday through a statement on SpaceX's website.
The combined entity will create "the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world's foremost real-time information and free speech platform," according to the announcement. The deal values SpaceX at $1 trillion and xAI at $250 billion, positioning the merged company for a stock market listing valued well over $1 trillion.
Through the acquisition, SpaceX gains xAI's properties including the Grok chatbot and the social media platform X. The merger comes as Musk has pursued plans to construct datacenters and solar-powered satellites in space to power artificial intelligence infrastructure. The deal announcement specifically cited these ambitions as motivation.
"Current advances in AI are dependent on large terrestrial datacenters, which require immense amounts of power and cooling," the announcement stated. "In the long term, space-based AI is obviously the only way to scale."
The public offering is expected to occur in early summer, timed to coincide with Musk's birthday on June 28 and a planetary alignment when Jupiter and Venus appear in close proximity. SpaceX has been rapidly increasing its valuation. In December, the company sent a letter to investors revealing an expected value of $800 billion. xAI has also seen its valuation surge during the AI boom, announcing a $20 billion Series E fundraise last month from major investors that valued the company at $230 billion.
Both companies have recently expanded their business portfolios. xAI acquired the platform X in an all-stock transaction in early 2025. Last month, Tesla announced it would invest $2 billion in xAI, further intertwining Musk's various business interests.
Musk appeared to give vague confirmation of the acquisition earlier Monday, writing simply "yes" in reply to a post on X referencing merger reports. Speculation about the deal first surfaced through Reuters reporting in recent days.
The announcement provides a positive development for Musk following Tesla's recent earnings report showing declining revenues. The merger consolidates several of Musk's ventures under a single entity preparing for public markets, combining SpaceX's dominance in satellite launches and federal government contracts with xAI's artificial intelligence capabilities and X's communications platform.