Elon Musk’s SpaceX and xAI Unite in a Historic $1.25 Trillion Deal
In a groundbreaking move that reshapes the tech landscape, Elon Musk has completed the acquisition of his AI startup xAI by SpaceX, creating the world’s most valuable private company valued at $1.25 trillion. The merger was announced on February 2, 2026, marking the largest acquisition involving a private target in history.
The deal combines SpaceX, valued at approximately $800 billion in its last secondary offering, with xAI, which was valued at $230 billion after its recent $20 billion funding round. The transaction creates what Musk describes as “the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications.”
According to reports, the merger is primarily driven by Musk’s vision to build orbital data centers in space. In his announcement, Musk stated that “global electricity demand for AI simply cannot be met with terrestrial solutions” and that space-based satellites could harness solar power continuously to support AI compute needs. SpaceX has already filed with the FCC for authorization to launch AI satellites as part of this ambitious plan.
The combined company is expected to pursue an initial public offering later in 2026, potentially raising up to $50 billion. Early investors in the xAI funding round included:
- Nvidia
- Cisco Investments
- Fidelity
- Qatar Investment Authority
Tesla, Musk’s electric vehicle company, also invested approximately $2 billion in xAI last month.
Source: CNBC