Two major companies under Elon Musk will now merge, as SpaceX has officially announced its acquisition of artificial intelligence start-up xAI. The deal creates a combined company spanning aerospace, AI development, satellite-based internet and social media, positioning it as one of the most powerful private technology groups in the world.
Although the companies did not formally disclose financial terms, sources familiar with the matter said the transaction values SpaceX at around US$1 trillion and xAI at roughly US$125 billion. This places the combined entity at approximately US$1.25 trillion, making it one of the most valuable unlisted companies globally.
In a memo published by SpaceX, Musk described the merger as forming an “innovation engine” that brings AI, rockets, space-based internet and media under one roof. The combined organisation now covers SpaceX’s launch operations and Starlink satellite network, alongside xAI’s AI models and its ownership of the social platform X, formerly known as Twitter.
Founded in 2002, SpaceX operates multiple rocket programmes and has deployed nearly 10,000 satellites in orbit. Its Starlink service now serves close to nine million customers worldwide, giving the company a massive space-based communications footprint that could also support future AI ambitions.
xAI, founded in 2023 as a competitor to OpenAI, has focused on large language models and its Grok chatbot. The company acquired X in 2025, combining access to real-time social data with its AI models, a move Musk said would unify data, models, compute, distribution and talent.
Above And Beyond
Musk has repeatedly pointed to space as a long-term solution to the energy and scaling challenges facing AI. He said the company will initially focus on launching AI-related satellites, with the longer-term goal of building space-based data centres, arguing that computing for AI could eventually become more efficient in space than on Earth.
He also framed the merger as a step toward much larger ambitions, including self-growing bases on the Moon and the long-term goal of a civilisation on Mars. He said space-based AI would help fund and enable expansion beyond Earth.
Tesla Ties And What Could Come Next
The move also follows closer ties between xAI and Tesla. Last month, Tesla disclosed a US$2 billion investment into xAI, with Musk telling investors he envisions xAI acting as an “orchestra conductor” for Tesla factories that use autonomous robots. Tesla has also signalled a significant strategic pivot toward robotics, despite shareholder concerns over diverting resources to other Musk-led companies.
With SpaceX and xAI now combined, Neuralink and The Boring Company remain the only major Musk ventures not integrated into a larger group. Musk has previously floated the idea of deeper integration across his companies, including speculation that Tesla could one day merge with SpaceX, suggesting further consolidation may still be on the table.
(Source: SpaceX [official website], via Bloomberg / BBC)
