SpaceX acquires xAI in a landmark deal, merging space and AI ambitions while strengthening data centre capabilities amid rising competition.
Elon Musk’s SpaceX has acquired his artificial-intelligence startup xAI in a record-setting deal that merges the rocket-and-satellite company with the maker of the Grok chatbot, aiming to unify Musk’s AI and space ambitions. The acquisition is one of the largest in technology sector history, combining a space-and-defence contractor with a fast-growing AI firm.
The deal values SpaceX at $1 trillion and xAI at $250 billion. xAI investors will receive 0.1433 SpaceX shares for each xAI share, with some executives able to opt for cash at $75.46 per share. Musk described the merger as a step toward “scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars.” The combined company is expected to price shares at approximately $527 each.
The acquisition could bolster SpaceX’s data-centre ambitions as Musk competes with Alphabet, Meta, Amazon-backed Anthropic and OpenAI in the AI sector. The merger also consolidates Musk’s business empire, informally dubbed the “Muskonomy,” which includes Tesla, Neuralink and the Boring Company. Musk has previously integrated his ventures, folding social media platform X into xAI last year and acquiring SolarCity via Tesla stock in 2016.
The transaction, surpassing Vodafone’s $203 billion Mannesmann takeover in 2000, may attract regulatory and investor scrutiny over governance, valuation and conflicts of interest. SpaceX holds billions in federal contracts with NASA, the Department of Defense and intelligence agencies, which could review the merger for national security risks. The acquisition also positions SpaceX for a potential blockbuster public offering this year, with a projected valuation exceeding $1.5 trillion.
