Elon Musk ‘unite’ SpaceX and xAI in $1.25 trillion mega merger

Elon Musk has taken a major step in his technology empire by merging his rocket company SpaceX with his artificial intelligence startup xAI in a deal that values the combined business at about $1.25 trillion, according to Bloomberg. The move brings together two of the most talked-about private companies in the world, each known for its ambitious goals in space travel and advanced computing.

The merger was announced in a memo to employees and confirmed in a statement on SpaceX’s own website, signed by Musk. In that statement, SpaceX said it had acquired xAI as part of a plan to build a more integrated innovation engine spanning artificial intelligence, space technology, satellite internet, direct-to-mobile communications and real-time information platforms.




SpaceX and xAI had been separate entities until this announcement. SpaceX, best known for its Falcon and Starship rockets and its Starlink satellite internet network, has been widely expected to go public later this year. xAI has gained attention for its AI models and its Grok chatbot, which competes with other major industry efforts.

What the SpaceX and xAI merger means

Under the terms of the deal, SpaceX and xAI will now operate as a single company with a valuation of around $1.25 trillion. That figure comes from a memo shared internally and reported by Bloomberg, which cited people familiar with the matter. In that memo, shares in the combined company were expected to be priced at about $527 each, though detailed public filings have not yet been made available.

The arrangement reflects Musk’s goal of uniting his work in space exploration and artificial intelligence into one cohesive strategy. SpaceX’s existing businesses include rocket launches for NASA, the US Department of Defense and commercial customers, along with the Starlink satellite system that delivers broadband internet around the world. Meanwhile, xAI has developed large AI models and the Grok chatbot that compete with other generative AI offerings.

In recent months, Musk has spoken about the growing demands of AI computation, saying that future large-scale AI systems may need infrastructure that goes beyond terrestrial data centers. The concept of building AI systems in space, such as orbiting data centers powered by solar energy, has been suggested as one potential long-term direction for the combined company.

A new technology powerhouse

By bringing SpaceX and xAI together, Musk is creating what many analysts describe as a new kind of technological powerhouse that spans physical and digital frontiers. The deal consolidates Musk’s interests in AI, rocket technology, satellite connectivity and real-time communications. Though SpaceX and xAI previously worked independently, the merger signals a closer alignment of their missions under Musk’s leadership.

This merger also places the spotlight on how Musk’s companies interact and support one another. Earlier actions in recent years saw Musk’s social media platform X being folded into the xAI ecosystem, adding digital communications to the mix of Musk’s AI ambitions. Now, that integrated AI component becomes part of a larger space-based infrastructure plan.

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