Elon Musk announced on Monday that SpaceX has acquired his artificial-intelligence startup xAI in a landmark SpaceX xAI acquisition, merging his ambitions in AI and space into a single, ambitious enterprise. The deal combines SpaceX’s rocket-and-satellite operations with xAI, the creator of the Grok chatbot, forming one of the most ambitious technology tie-ups in recent years.
The merger pairs a space-and-defense contractor with a rapidly expanding AI company, whose expenses are heavily driven by chips, data centres, and energy. Analysts note the SpaceX xAI acquisition could strengthen SpaceX’s data-centre capabilities, positioning it to compete with AI rivals such as Google, Meta, Anthropic, and OpenAI.
The transaction reportedly values SpaceX at $1 trillion and xAI at $250 billion. As part of the deal, xAI investors will receive 0.1433 shares of SpaceX for each share of xAI, while some executives may choose cash instead of stock at $75.46 per share.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!” Musk said.
The acquisition sets a new record for global M&A deals, surpassing Vodafone’s $203 billion purchase of Germany’s Mannesmann in 2000. The combined company is expected to have a share price around $527 each. SpaceX was previously valued at $800 billion in a recent insider share sale, while xAI’s most recent valuation in November stood at $230 billion.
The merger comes as SpaceX plans a major public offering this year, potentially valuing the company at over $1.5 trillion.
The SpaceX xAI acquisition consolidates Musk’s extensive business ecosystem, often referred to as the “Muskonomy,” which includes Tesla, Neuralink, and the Boring Company. Musk has a history of integrating his ventures, such as folding social media platform X into xAI through a share swap last year, granting the AI startup access to the platform’s data and distribution. In 2016, he used Tesla stock to acquire his solar-energy firm SolarCity.
The agreement may attract regulatory and investor scrutiny over governance, valuation, and conflicts of interest, given Musk’s overlapping leadership roles across multiple companies and the potential transfer of personnel, technology, and contracts between entities.
SpaceX also holds billions in federal contracts with NASA, the Department of Defense, and intelligence agencies, all of which have oversight authority for mergers and acquisitions that could affect national security.
The acquisition positions SpaceX and xAI at the forefront of both AI innovation and space exploration, merging two of Musk’s most ambitious ventures into a single, mutually reinforcing enterprise.