Elon Musk has taken the unprecedented step of merging his aerospace powerhouse SpaceX with his artificial intelligence venture xAI in a deal that values the combined company at roughly $1.25 trillion, a move that is set to reshape the landscape of space, AI and technology industries as SpaceX gears up for a blockbuster public offering later in 2026.
In a Monday announcement posted on SpaceX’s official channels, Musk confirmed that SpaceX has acquired xAI, bringing the AI startup — best known for its Grok chatbot — under the umbrella of the rocket and satellite launch firm. Industry sources say the merger effectively consolidates Musk’s ambitions across multiple high-growth sectors, including aerospace, satellite internet, artificial intelligence and real-time digital communications.
SpaceX, one of the world’s most valuable private companies, had been valued at about $1 trillion, while xAI was valued at roughly $250 billion in recent funding rounds. The combined valuation of $1.25 trillion, expected to be reflected in the prospective initial public offering, would make this one of the largest technology mergers in history.
Musk’s vision for the newly integrated company goes beyond a simple financial play. In statements explaining the strategy, he emphasized that the future of artificial intelligence development is constrained by the power and cooling demands of terrestrial data centers. Musk argues that advancing AI at scale will require data infrastructures in space, powered by solar energy and free from the limitations faced on Earth. This rationale — central to the merger — marks a bold bet on orbiting data centers and AI compute facilities to support next-generation AI workloads.
Under the terms of the deal, xAI’s assets — including its flagship products and its controlling stake in the social media platform X — will now be folded into SpaceX’s operations. xAI investors are expected to receive shares in the combined entity through a stock-for-stock exchange, with some executives potentially opting for cash payouts instead of equity.
The move also signals Musk’s intent to build a vertically integrated innovation engine, blending rocket technology, satellite broadband connectivity via Starlink, AI research and social media platforms into a unified corporate structure. Musk and his team believe this integrated approach can accelerate development timelines and create synergies across engineering, data and customer reach that few competitors can match.
Despite the widespread attention the deal has garnered for its scale and ambition, xAI has faced criticism over some of the outputs from its Grok AI chatbot, including allegations that it promoted harmful or inappropriate content. Still, interest from investors has remained strong, with xAI securing significant funding leading up to the merger.
The combined SpaceX-xAI entity is now positioning itself for what could be one of the most watched IPOs in corporate history, potentially exceeding the $1 trillion mark and attracting global investor interest. Musk’s effort to unify his ventures under one roof highlights his long-term bet on a future where space infrastructure and artificial intelligence are intrinsically linked.
