Musk's SpaceX & xAI Merge to Form the World's Most Valuable Private Company
Posted On: 2/5/2026, 1:02:29 PM
Last Update: 2/5/2026, 1:02:29 PM
Elon Musk's aerospace company has acquired his artificial intelligence startup, xAI, for $1.25 trillion (£910 billion), uniting a part of Musk's empire as SpaceX prepares to go public later this year.
Expressly, the two businesses declared that they will join to form “the most ambitious, vertically integrated innovation engine on (and off) Earth.”
AI, rockets, space-based internet, direct-to-mobile connectivity, and a major platform for free speech and real-time information are all part of the joint venture.
Musk's Space-AI Roadmap
SpaceX will purchase xAI assets, such as the social media site X and the Grok chatbot. The acquisition is in line with Musk's expensive aspirations to build data centres and solar-powered satellites in orbit to enable artificial intelligence.
With a combined valuation of $1 trillion for SpaceX and $250 billion for xAI, the purchase positions the combined company for a stock market float that is anticipated to surpass $1 trillion. The float is scheduled for early summer to coincide with both Musk's birthday and a planetary event.
Interestingly, Musk will be 55 on June 28, which also happens to be when Jupiter and Venus will be close together. Musk's plan to build space-based data centres was cited as a major factor in the latest deal announcement.
Besides, current AI development depends on power-intensive terrestrial datacentres, which pose challenges for communities and the environment. The announcement suggests that in the long term, space-based AI is the only viable solution for scaling electricity needs.
SpaceX & xAI's Growing Financial Footprint
As seen by xAI's acquisition of the platform X in early 2025 and Tesla's announcement last month of a $2 billion investment in xAI, Musk has recently started combining parts of his enterprises.
Recent appraisals of both SpaceX and xAI were noteworthy, with SpaceX forecasting an expected value of $800 billion as it leads the US federal government in satellite launches and earns important contracts.
In addition, xAI has raised its valuation, announcing a $20 billion Series E funding that values it at $230 billion, despite controversies surrounding its Grok AI tool for spreading nonconsensual sexualised deepfake photos and supporting racist ideas.
Recently, there has been a surge in rumours and leaks regarding a merger transaction, which Musk obliquely confirmed by answering “yes” on X. In light of Tesla's financial report, which revealed dwindling revenues and difficulties in the automotive industry, Musk can use this news as a constructive diversion.
Soon, the Department of Justice released 3 million files related to Jeffrey Epstein, Elon Musk's friendly email exchanges and plans to visit his private island were uncovered.
Musk labelled the email release as a “distraction” on X and acknowledged that such correspondence could be misinterpreted by those aiming to tarnish his reputation.
Empowering Aspirations
Musk's memo on the xAI-SpaceX merger emphasises space as critical to meeting AI's huge energy demands. He claims that space-based AI is the only scalable solution, with near-term intentions to launch AI satellites and long-term goals to establish orbital data centres, potentially funding Moon outposts, a Mars civilisation, and global development.
Overall, Neuralink and The Boring Company are the only significant businesses he hasn't yet merged into larger ones. To combine talent, data, and computation, xAI purchased X in an all-stock transaction last March.
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