Elon Musk said Monday that SpaceX has acquired his artificial intelligence start-up xAI in a record-setting deal that unites Musk’s AI and space ambitions by combining the rocket-and-satellite company with the creator of the Grok chatbot.
The deal, first reported by Reuters last week, represents one of the most ambitious tie-ups in the tech sector to date, combining a space and defense contractor with a fast-growing AI developer whose costs are largely driven by chips, data centers and energy. It could also bolster SpaceX’s data center ambitions as Musk competes with rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI in the AI sector.
The transaction values SpaceX at $1 trillion and xAI at $250 billion, according to a person familiar with the matter.
“This marks not only the next chapter, but the next book in SpaceX and xAI’s mission: scaling to create a sentient sun to understand the universe and extend the light of consciousness to the stars!” Musk said.
The purchase of xAI sets a new record for the world’s biggest M&A deal, a distinction held for more than 25 years when Vodafone bought Germany’s Mannesmann in a hostile takeover worth $203 billion in 2000, according to data compiled by LSEG.
The combined company SpaceX and xAI are expected to price shares at about $527 each, another person familiar with the matter said. SpaceX was already the world’s most valuable privately held company, last valued at $800 billion in a recent insider stock sale. xAI was last valued at $230 billion in November, according to the Wall Street Journal.
The merger comes as the space company plans a blockbuster public offering this year that could value it at more than $1.5 trillion, two people familiar with the matter said.
SpaceX, xAI and Musk did not immediately respond to requests for comment.
The deal further consolidates Musk’s sprawling business empire and assets into a tighter, mutually reinforcing ecosystem — what some investors and analysts informally call the “Muskonomy” — that already includes Tesla, brain-chip maker Neuralink and tunnel company Boring Company.
The world’s richest man has a history of merging his ventures. Musk folded social media platform X into xAI through a stock swap last year, giving the AI start-up access to the platform’s data and distribution. In 2016, he used Tesla shares to buy his solar company SolarCity.
The deal could draw scrutiny from regulators and investors over governance, valuation and conflicts of interest given Musk’s overlapping leadership roles across multiple firms, as well as the potential movement of engineers, proprietary technology and contracts between entities.
SpaceX also has billions of dollars in federal contracts with NASA, the Defense Department and intelligence agencies, all of which have some authority to review M&A transactions for national security and other risks.
