Elon Musk is combining SpaceX and xAI in a landmark deal that values the enlarged entity at $1.25 trillion. The merger, announced via SpaceX’s website, aligns the billionaire’s space exploration success with his capital-intensive artificial intelligence ambitions.
The deal values SpaceX at $1 trillion and xAI at $250 billion. The combined firm aims to become a “vertically-integrated innovation engine,” merging rockets, satellite internet, and real-time AI processing.
According to sources familiar with the matter, the entity is preparing for an initial public offering (IPO) later this year that could raise as much as $50 billion, potentially the largest in history.
Musk stated that within the next two to three years, the most cost-efficient way to perform AI computations will be in space. To support this vision, SpaceX recently filed for permission to launch up to one million satellites into Earth’s orbit.
The merger allows xAI, which burns approximately $1 billion monthly, to tap into the growing revenues of SpaceX’s Starlink network.
Starlink’s sales have recently outpaced rocket launches, providing a robust financial backbone for xAI’s “Grok” chatbot and universe-exploration goals.
Amidst the announcement, SpaceX reported a rare mishap involving a Falcon 9 rocket. While Starlink satellites were deployed safely, the rocket’s upper stage encountered an issue before de-orbiting.
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