SpaceX and xAI Merge in a Historic $1.2 Trillion Deal
In a groundbreaking move that reshapes the technology landscape, Elon Musk’s SpaceX has officially acquired his artificial intelligence startup xAI, creating what Musk calls “the most ambitious, vertically-integrated innovation engine on (and off) Earth.”
The merger values the combined entity at approximately $1.2 trillion, with SpaceX stepping up from about $800 billion and xAI valued north of $200 billion. This deal dramatically alters SpaceX’s planned initial public offering, potentially making it one of the largest in history.
Musk envisions using the combined company to build data centers in space. He has already requested Federal Communications Commission authorization to launch up to 1 million satellites as part of his “orbital data centers” concept. In a company memo, Musk stated that within 2 to 3 years, “the lowest cost way to generate AI compute will be in space.”
The acquisition comes as xAI reportedly burns through $1 billion per month developing its Grok AI model to compete with OpenAI’s ChatGPT. Meanwhile, SpaceX generates substantial revenue through its Starlink satellite internet service, which boasts:
- More than 9,000 satellites in orbit
- Roughly 9 million customers
Major companies including General Motors, Boeing, and Google have already expressed interest in the combined entity’s capabilities. They are particularly interested in accessing critical materials and advanced AI technologies for their operations.
Source: CNBC