Elon Musk plans to merge SpaceX with xAI, according to people familiar with the matter, in a deal that brings together the billionaire’s increasingly expensive ambitions to dominate artificial intelligence and space exploration.
The deal was announced in a memo on Monday, said the sources, who requested anonymity because the information is not public. The combined company is expected to price shares at about $527 each and would have a valuation of $1.25 trillion, according to some of the people.
Representatives for SpaceX and xAI did not immediately respond to requests for comment.
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Bloomberg News had previously reported on the discussions. SpaceX plans an initial public offering (IPO) that could raise up to $50 billion, according to Bloomberg. The company also discussed a possible merger with Tesla.
The agreement unites two of the largest privately held companies in the world. xAI raised funds in January with a valuation of US$230 billion, while SpaceX was preparing to carry out a share sale in December with a valuation of around US$800 billion, according to Bloomberg, and is evaluating a possible IPO.
The move also further intertwines Musk’s diverse businesses. The billionaire bought social media platform Twitter in late 2022, renamed it X and then merged the site with his artificial intelligence startup, xAI, in a $33 billion deal. xAI, which also operates the Grok chatbot, is an expensive operation, burning around $1 billion a month to fulfill its stated ambition of gaining “a deeper understanding of our universe.” A merger with SpaceX brings together capital, talent and access to computing power — and blurs corporate boundaries.
The union could realize Musk’s vision of putting data centers in space to perform complex AI-driven computing. SpaceX is requesting authorization to launch up to one million satellites into Earth’s orbit for this plan, according to a document filed on Friday.
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