SpaceX Merges with xAI in a Historic $1.25 Trillion Deal
Elon Musk announced on Monday that SpaceX, his space exploration company, has acquired xAI, his artificial intelligence firm, in a groundbreaking deal valued at $1.25 trillion. This merger is noted as the largest of its kind in history, combining SpaceX’s rocket and satellite operations with xAI’s AI capabilities and X social media platform.
As per the documents reviewed by CNBC, the deal values SpaceX at $1 trillion and xAI at $250 billion. Musk, in a blog post, emphasized that the merger aims to create “the most ambitious, vertically-integrated innovation engine on (and off) Earth”. The primary focus of this merger is to establish orbital data centers in space to cater to the burgeoning AI computing demands.
SpaceX has recently submitted an application to the Federal Communications Commission to launch up to 1 million satellites as part of its orbital data center constellation. Musk predicts that within the next 2-3 years, space-based computing will become the most cost-effective method to generate AI compute power. This merger announcement comes as SpaceX gears up for a potential blockbuster IPO, possibly in June this year.
The merger brings together SpaceX’s profitable operations, which generated approximately $8 billion in profit on $15-16 billion revenue in 2025, and xAI’s ambitious AI projects. The merged entity plans to utilize SpaceX’s Starlink satellite network and government contracts in conjunction with xAI’s Grok AI chatbot and X platform.
Source: CNBC