SpaceX and xAI Merge to Build the Future of AI in Space

SpaceX and xAI Combine Ahead of a Potential IPO

SpaceX is likely to soon become one of the world’s most popular companies among investors, at least as soon as it does its IPO, rumored to be scheduled for mid-2026. So far, SpaceX’s valuation mostly relied on its impressive feat in reusable rockets, as well as the associated first-of-a-kind Internet broadband network Starlink, which has generated for the company much-needed recurring commercial cash flow independent from defense and NASA contracts.

But it seems that SpaceX will now be a lot more closely associated with Elon Musk’s other venture, with the announced merger with xAI, the AI company that also owns X.com (formerly known as Twitter).

The news has set a massive wave of discussions and rumors to explain the rationale behind that move, from orbital data centers to future robotics space exploration and lunar & Martian colonies. And of course, one of the world’s largest companies, Tesla, is brought into these speculations as well.

The tone was equally enthusiastic from Musk himself, speaking like a character straight out of a science-fiction novel:

“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!”

xAI + SpaceX: What We Know So Far

Background

It was announced in a SpaceX blog post penned by Elon Musk that SpaceX has acquired xAI with the stated goal to:

“Form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform.”

xAI is Elon Musk’s AI company, which itself acquired X.com from Musk in 2025 in an all-stock deal valued at $33B.

xAI has built its own large language models (Grok series), which were integrated into X in 2023. The generative AI chatbot was designed to be “edgy” (in Musk’s own words) and answer questions with a bit of wit. Grok is known to use X as a primary source of information and news, leveraging the massive treasure trove of data that is the website.

xAI also constructed in record time (122 days) “Colossus,” which became operational in 2024 as the world’s largest AI supercomputer.

In March 2025, xAI acquired Hotshot, a startup focusing on video generation tools. It also introduced DeeperSearch for advanced web exploration and Grokipedia, an AI-powered alternative to Wikipedia.

By The Numbers

The news of the merger with SpaceX comes just a few days after xAI raised $20B in a Series E fundraising, which we now can imagine provided some selected investors an opportunity to access SpaceX and helped alleviate any internal opposition to the move among xAI shareholders (with SpaceX being fully controlled by Musk).

The recent fundraising had made xAI’s valuation at around $200B. This merger seems to value xAI at around $250B: investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI as part of the acquisition. Some xAI executives may also opt for cash instead of SpaceX stock at $75.46 per share.

The combined company of SpaceX and xAI is expected to price shares at about $527 each.

The deal reportedly would value the combined company at $1.25T to $1.5T, confirming the estimated value of SpaceX around a trillion or more, which would be massive for a still privately listed company. For reference, Tesla, one of the world’s largest companies, is valued at $1.32T.

This would also make the merger the world’s largest M&A deal, a distinction held until now for more than 25 years when Vodafone bought Germany’s Mannesmann for $203B.

Why Now? Toward Space-Based AI

Solving The AI Energy Conundrum

Swipe to scroll →