Editorial illustration for Musk merges xAI with SpaceX, forming USD 1.25 trillion private giant
Musk Merges xAI and SpaceX into $1.25T Private Giant
Musk merges xAI with SpaceX, forming USD 1.25 trillion private giant
Elon Musk is folding his AI venture, xAI, into the rocket firm that put the first private payload into orbit. Bloomberg reports the combined enterprise now carries a price tag of $1.25 trillion, nudging it ahead of every other privately held outfit on the planet. The move ties together two of Musk’s most capital‑intensive projects at a moment when SpaceX was already gearing up for a new launch cadence.
While the financial math is striking, the real question is how the merger reshapes the ambitions of a company whose name evokes the final frontier. Here’s the thing: merging a cutting‑edge artificial‑intelligence lab with a launch‑service powerhouse blurs the line between terrestrial computing and off‑world logistics. It forces investors and observers alike to reconsider what “space” actually means in the context of a trillion‑dollar conglomerate.
"I mean, space is called 'space' for a reason."
I mean, space is called 'space' for a reason." The deal, which pulls together two of Musk's largest private ventures, values the combined entity at $1.25 trillion, making it the most valuable private company in the world, according to a report from Bloomberg. SpaceX was in the process of preparing to go public later this year before the xAI acquisition was announced. The space firm's plans for an initial public offering are still on, according to Bloomberg.
In December, SpaceX told employees that it would buy insider shares in a deal that would value the rocket company at $800 billion, according to The New York Times. Last month, xAI announced that it had raised $20 billion from investors, bringing the company's valuation to roughly $230 billion. This isn't the first time Musk has sought to consolidate parts of his vast business empire, which is largely privately owned and includes xAI, SpaceX, the brain interface company Neuralink, and the tunnel transportation firm the Boring Company.
Last year, xAI acquired Musk's social media platform, X, formerly known as Twitter, in a deal that valued the combined entity at more than $110 billion. Since then, xAI's core product, Grok, has become further integrated into the social media platform. Grok is featured prominently in various X features, and Musk has claimed the app's content-recommendation algorithm is powered by xAI's technology.
A decade ago, Musk also used shares of his electric car company Tesla to purchase SolarCity, a renewable energy firm that was run at the time by cousin Lyndon Rive. The xAI acquisition demonstrates how Musk can use his expansive network of companies to help power his own often grandiose visions of the future.
The merger places two of Musk’s biggest private ventures under a single banner, valuing the new entity at $1.25 trillion, Bloomberg reports. Space‑based AI, Musk argues, is “obviously the only way to scale” given the “global electricity demand for AI” that “cannot be met with terrestrial solutions.” He adds, “I mean, space is called ‘space’ for a reason.” The claim that data centers will soon orbit Earth to power AI workloads is bold, yet the article provides no detail on how such infrastructure would be built, funded or operated. SpaceX was reportedly “preparing t…,” leaving the timeline and technical roadmap unclear.
Will the combined company manage the engineering, regulatory and economic hurdles of large‑scale space computing? The valuation makes the venture the most valuable private company in the world, but the path from concept to functional, space‑hosted AI services remains uncertain. Until concrete milestones are disclosed, the practical impact of this merger will have to be judged against the ambitious statements made in Musk’s blog post.
Further Reading
- Elon Musk Reportedly Wants to Merge SpaceX and XAI - Business Insider
- Elon Musk's SpaceX Said to Consider Merger With Tesla or xAI - Bloomberg Podcasts
- Elon Musk Plans Ultimate Mega-Merger to Change Humanity Forever - The Electric Viking
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Common Questions Answered
How much is the combined xAI and SpaceX enterprise valued at?
According to the Bloomberg report, the merged enterprise is valued at $1.25 trillion, making it the most valuable private company in the world. This unprecedented valuation brings together Musk's AI and space ventures under a single corporate umbrella.
What is Musk's rationale for merging xAI and SpaceX?
Musk argues that space-based AI is the only viable solution for scaling computational infrastructure due to global electricity constraints for AI workloads. He provocatively notes that 'space is called space for a reason', suggesting that orbital data centers could be the future of AI computational capacity.
What are the plans for SpaceX's initial public offering (IPO) after the xAI merger?
Despite the merger with xAI, SpaceX is still planning to proceed with its initial public offering later this year. The company had already been preparing for the IPO before the xAI acquisition was announced, indicating that the merger has not derailed its public listing plans.