SpaceX and xAI Unite in a Historic $1.25 Trillion Mega-Merger
Elon Musk has orchestrated one of the most monumental corporate mergers in history, amalgamating SpaceX with his artificial intelligence startup xAI. The deal, valued at an astounding $1.25 trillion, was announced on February 2, 2026. This merger propels the newly formed entity to the position of the world’s most valuable private company, with a planned IPO looming later this year.
This strategic merger unifies SpaceX’s prowess in rocket manufacturing and the Starlink satellite network, which operates over 9,000 satellites, with xAI’s advanced Grok AI chatbot and artificial intelligence infrastructure. Musk envisions this fusion as the creation of “the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet.”
The deal is structured as a share exchange, with the conversion rate set as follows:
- xAI shares at $75.46 are converted into 0.1433 shares of SpaceX stock
- Each SpaceX share is valued at $526.59
In 2025, SpaceX generated an estimated profit of $8 billion on a revenue of $15-16 billion. On the other hand, xAI has been investing heavily, approximately $1 billion per month, in its race against OpenAI and Google in the generative AI market.
Musk sees this merger as a crucial step towards his vision of constructing orbital data centers. He predicts that within 2-3 years, space will emerge as the most cost-efficient location for AI computing infrastructure.
Source: CNBC