San Francisco/New York: Elon Musk confirmed that SpaceX has taken over his artificial intelligence venture xAI in a deal that reshapes the technology landscape and brings his AI and space businesses under a single corporate umbrella.
The acquisition, which had been reported earlier by media outlets, is being described as one of the largest mergers ever announced, both in scale and ambition. By combining SpaceX’s rocket, satellite and defence operations with xAI’s rapidly expanding artificial intelligence capabilities, Musk is positioning the merged entity at the intersection of space infrastructure and advanced computing.
People familiar with the transaction said the agreement places a valuation of about $1 trillion on SpaceX, while xAI has been valued at roughly $250 billion. Under the terms of the deal, xAI shareholders will receive 0.1433 shares of SpaceX for each share they hold. Some senior executives at xAI have also been given the option to cash out their holdings at $75.46 per share instead of taking equity in SpaceX.
Musk said the move represents a major step forward in aligning the missions of both companies, adding that the merger is intended to accelerate scientific understanding of the universe while expanding the reach of advanced intelligence beyond Earth.
Industry analysts view the tie-up as a bold effort to strengthen SpaceX’s data and computing ecosystem at a time when artificial intelligence development is becoming increasingly resource-intensive. Training and deploying large AI models requires massive investments in chips, power and data centres—areas where SpaceX’s satellite network and launch capabilities could provide a strategic edge.
The transaction eclipses the previous record for the largest merger ever announced, a title long held by Vodafone’s $203 billion takeover of Germany’s Mannesmann in 2000, according to market data providers.
Following the merger, shares of the combined SpaceX–xAI entity are expected to be priced at around $527, another source said. SpaceX was already the most valuable privately held company globally, with a recent insider transaction valuing it near $800 billion. xAI, meanwhile, was last valued at approximately $230 billion late last year.
The consolidation comes as SpaceX prepares for a highly anticipated public listing, which sources say could value the company at more than $1.5 trillion when it eventually hits the market.
The deal further tightens Musk’s network of interconnected businesses, which also includes electric vehicle maker Tesla, brain-interface startup Neuralink and infrastructure firm the Boring Company. Musk has previously combined his ventures, notably folding social media platform X into xAI through a share swap in 2024 and acquiring SolarCity using Tesla stock in 2016.
However, the merger may invite closer scrutiny from regulators and investors, particularly over governance, valuation and potential conflicts of interest. SpaceX holds substantial contracts with US government agencies, including NASA and the Department of Defense, which could trigger national security and regulatory reviews of the transaction.
Neither SpaceX nor xAI issued additional statements following Musk’s announcement.
