By Blessing Nweke
SpaceX on Monday announced it has acquired xAI, the artificial intelligence startup founded by Elon Musk that also owns the X social media platform, in a deal that further consolidates Musk’s growing business empire. The acquisition brings together two of Musk’s most high-profile companies as SpaceX prepares for a highly anticipated initial public offering expected later this year.
In a news release, Musk said the merger aims to develop AI data centers in outer space, arguing that space is the only viable long-term solution for scaling advanced artificial intelligence. He described the combined entity as “the most ambitious, vertically-integrated innovation engine on (and off) Earth,” uniting AI, rockets, space-based internet, direct-to-mobile communications, and a global real-time information platform.
According to Bloomberg News, the deal values the combined company at more than $1.2 trillion, which would make it the world’s most valuable private company. Your News has not independently verified the valuation, and neither company responded to requests for comment.
Musk emphasized that the massive energy and space demands of next-generation AI systems would be better met beyond Earth. “In the long term, space-based AI is obviously the only way to scale,” he wrote, adding that within two to three years, space could become the lowest-cost environment for AI computing. Musk has previously missed several timelines he set for his companies, making the ambitious projection uncertain.
SpaceX, founded in 2002, already plays a central role in global space infrastructure, operating more than 9,000 satellites and providing satellite-based internet services to consumers and governments. The company also conducts reusable rocket tests and holds multiple NASA contracts, including work related to returning humans to the moon.
Meanwhile, xAI has reportedly reached a valuation exceeding $200 billion but has faced scrutiny over its AI chatbot, Grok, and concerns related to image generation and deepfakes. The merger marks the closest integration yet among Musk’s ventures, further blurring the lines between his aerospace, AI, and technology ambitions.