SpaceX Acquires Elon Musk’s xAI in Major Merger Ahead of Potential IPO

Elon Musk’s SpaceX has officially acquired his artificial intelligence startup xAI, known for developing the Grok chatbot. The deal, announced via a memo from Musk on SpaceX’s website, combines AI capabilities with SpaceX’s expertise in rockets, space-based internet (Starlink), and related technologies to create what Musk describes as a powerful ‘innovation engine’ under one roof. Financial terms were not publicly disclosed, but sources indicate xAI was valued at around $125 billion to $250 billion, contributing to a combined entity potentially worth over $1 trillion, positioning it as the most valuable private company ever. This follows xAI’s earlier acquisition of the social media platform X (formerly Twitter) in 2025 and Tesla’s $2 billion investment in xAI last month, despite some shareholder opposition. Musk envisions the merger enabling space-based AI solutions, such as orbital data centers and AI satellites, to address massive energy and compute demands for AI scaling. He emphasized long-term ambitions like funding lunar bases, Mars colonization, and broader space expansion. Analysts suggest the consolidation strengthens SpaceX’s narrative for an anticipated public listing (IPO) this year, highlighting capital efficiency amid high costs in AI infrastructure. The move unifies several of Musk’s ventures, leaving Neuralink and The Boring Company as the main independent entities. xAI’s Grok has faced regulatory scrutiny in Europe and the UK over its image generation features, leading to recent user restrictions.