British News Agency

The two companies announced the deal on Monday in a statement on SpaceX’s website, saying the merger would create “the world’s most ambitious vertically integrated innovation engine, combining artificial intelligence, rockets, space-based internet, direct-to-device mobile communications, and the world’s leading real-time information and free-expression platform on Earth (and beyond).”

SpaceX, one of the world’s most valuable private companies, will take over xAI assets including the Grok chatbot and the X social media platform. The acquisition comes as Musk pursues plans to place data centers and solar-powered satellites in space to support AI, an enormous and extremely costly undertaking.

Reports say the deal values SpaceX at $1 trillion and xAI at $250 billion, and that the combined company is preparing for an IPO valued well above $1 trillion. The IPO is expected in early summer, coinciding with planetary alignments and Musk’s birthday.

The announcement of the deal specifically cited Musk’s space-based data center plans as a key rationale.

The statement said: “Current advances in AI depend on massive terrestrial data centers that require enormous amounts of power and cooling. Global electricity demand for AI cannot be met with terrestrial solutions even in the near term without burdening communities and the environment. In the long term, space-based AI is clearly the only path to scaling.”