Elon Musk on Monday confirmed that SpaceX has acquired his artificial intelligence startup xAI in a deal that reshapes the global technology landscape and sets a new benchmark for mergers and acquisitions.
The transaction formally unites Musk’s ambitions in artificial intelligence and space infrastructure, combining the world’s most valuable private rocket company with the developer of the Grok chatbot.
The decision marks the clearest step yet toward building a tightly integrated personal conglomerate that spans space, AI, communications, mobility, and neurotechnology, binding his most ambitious bets into a single corporate orbit.
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Musk said on Monday that SpaceX had acquired xAI in a deal that values SpaceX at about $1 trillion and xAI at roughly $250 billion, according to people familiar with the transaction. Investors in xAI will receive 0.1433 shares of SpaceX for every xAI share, while some executives are being offered a cash alternative priced at $75.46 per share. The combined entity is expected to price shares at around $527, one of the people said.
The transaction, first reported by Reuters last week, overtakes the $203 billion Vodafone–Mannesmann takeover in 2000 to become the largest merger ever recorded, based on data compiled by LSEG. It also comes as SpaceX is preparing for what could be a landmark initial public offering later this year, with people familiar with the matter saying the listing could value the company at more than $1.5 trillion.
Musk framed the deal in sweeping terms, describing it as the next phase in a shared mission to extend intelligence beyond Earth. Behind the rhetoric, the industrial logic is more concrete. xAI, the developer of the Grok chatbot, is one of the most capital-intensive businesses in the AI race, with costs driven by chips, data centers, and electricity. SpaceX, through its Starlink satellite network, already operates one of the world’s largest private communications infrastructures and generates steady cash flow.
By bringing xAI under the SpaceX umbrella, Musk is effectively internalizing the infrastructure stack needed to compete with rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic, and OpenAI. Starlink offers global data distribution and a growing enterprise and government customer base, while SpaceX’s launch and satellite operations provide leverage over where and how future compute and data assets are deployed.
Ali Javaheri, a senior emerging spaces analyst at PitchBook, said Starlink was already a cash-flow engine and that the addition of AI created a new revenue layer. He noted that Starlink could also become a distribution surface for AI services and data, particularly if policy shifts allow certain categories of customer data to be used for model training. The longer-term prospect of orbital or space-based data centers, while still speculative, adds to a narrative that positions SpaceX as an integrated infrastructure platform rather than a pure rocket company.
The deal also underscores how Musk has been consolidating his businesses into a more unified structure. Last year, he merged social media platform X into xAI through a share swap, giving the AI startup direct access to real-time data and a built-in distribution channel. Earlier in his career, he used Tesla stock to acquire solar installer SolarCity, folding energy generation into his electric-vehicle ecosystem. Alongside Tesla, Neuralink, and the Boring Company, the SpaceX–xAI tie-up tightens what investors increasingly view as a single, interconnected industrial empire.
However, that strategy is believed to have come with risks. Investors have already expressed unease about aggressive spending and valuation assumptions across Musk’s companies. SpaceX was last valued at about $800 billion in a recent insider share sale, while xAI was valued at roughly $230 billion as recently as November, according to the Wall Street Journal. Combining them at higher figures concentrates both upside and downside into one balance sheet, just as public markets remain sensitive to capital intensity in AI and infrastructure.
Regulatory and governance questions are also likely to follow. SpaceX holds billions of dollars in contracts with NASA, the U.S. Department of Defense, and intelligence agencies, all of which have some authority to review transactions for national security implications. The deal may also draw attention to conflicts of interest, given Musk’s overlapping leadership roles and the potential movement of engineers, data, and proprietary technology between his companies.
Still, the timing suggests strategic calculation. Hyperscalers and AI developers are locked in a global build-out of compute and data-center capacity, with AI-related data-center deals hitting a record $61 billion in 2025. By merging xAI into SpaceX ahead of a potential IPO, Musk is presenting investors with a broader story: not just rockets and satellites, but a vertically integrated platform that links launch, connectivity, data, compute, and AI services.
In effect, the transaction formalizes what has been taking shape for years. Musk is no longer running a collection of loosely related ventures. He is assembling a personal conglomerate, designed so that each business feeds the others, and positioning it for the public markets as a single, expansive bet on the infrastructure of the future.