SpaceX Buys xAI in Record Deal, Uniting Musk’s AI and Space Ventures

Elon Musk said on Monday that SpaceX has acquired his artificial intelligence startup xAI in a record-setting deal, bringing together his space and AI ventures by combining the rocket-and-satellite company with the maker of the Grok chatbot.

The transaction, first reported by Reuters last week, is one of the most ambitious technology tie-ups to date, linking a major space and defence contractor with a fast-growing AI firm whose costs are driven largely by chips, data centres and energy consumption. The deal could also strengthen SpaceX’s data-centre ambitions as Musk competes with rivals such as Google, Meta, Amazon-backed Anthropic and OpenAI.

According to a person familiar with the matter, the deal values SpaceX at $1 trillion and xAI at $250 billion.

“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission,” Musk said, describing the merger as a step toward advancing artificial intelligence and space exploration.

The acquisition sets a new record for the world’s largest mergers and acquisitions deal, surpassing Vodafone’s $203 billion takeover of Germany’s Mannesmann in 2000, according to LSEG data.

Sources said the combined company is expected to price shares at around $527 each. SpaceX was previously valued at about $800 billion in a recent insider share sale, while xAI was valued at $230 billion in November, according to the Wall Street Journal.

The merger comes as SpaceX prepares for a potential blockbuster public offering this year that could value the company at more than $1.5 trillion, sources said.

SpaceX, xAI and Musk did not immediately respond to requests for comment.

The deal further consolidates Musk’s business empire, often referred to by analysts as the “Muskonomy,” which includes Tesla, Neuralink and the Boring Company. Musk has a history of merging his ventures, including folding social media platform X into xAI last year and acquiring SolarCity through Tesla in 2016.

However, the agreement may attract regulatory and investor scrutiny over governance, valuation and potential conflicts of interest, given Musk’s overlapping leadership roles and the possible sharing of staff, technology and contracts.

SpaceX also holds billions of dollars in federal contracts with NASA, the Pentagon and intelligence agencies, which may review the transaction for national security and other concerns.