NEW YORK, Feb 3, 2026, 10:09 EST
- Elon Musk said SpaceX has acquired his AI startup xAI in a deal valuing the combined company at $1.25 trillion
- xAI investors will receive 0.1433 SpaceX shares per xAI share, with some executives able to take cash at $75.46, a person familiar with the matter said
- The deal tightens Musk’s control ahead of a planned SpaceX IPO and could draw scrutiny because of SpaceX’s U.S. government contracts
Elon Musk said SpaceX has acquired his artificial-intelligence startup xAI in a deal valuing the combined company at $1.25 trillion, tying his AI push to the world’s most valuable private space company. The transaction values SpaceX at $1 trillion and xAI at $250 billion, a person familiar with the matter said. Reuters
The tie-up lands as SpaceX readies a public stock offering this year, a step that would open the closely held rocket builder to daily market pressure for the first time. Two people familiar with the plan said the IPO could value SpaceX at more than $1.5 trillion; an IPO is when a firm sells shares to the public for the first time.
It also pairs a space-and-defense contractor with an AI developer whose biggest bills are chips, data centers and power. Musk has pushed xAI’s Grok chatbot into a field already crowded with heavyweights such as Google, Meta and OpenAI.
Investors in xAI will receive 0.1433 SpaceX shares for each xAI share, the person said. Some xAI executives can choose cash instead, at $75.46 per share, the person added.
In a statement, Musk called the deal “the next chapter, but the next book,” and said the combined group would fuse AI, rockets, satellite internet and the social media platform X. Theverge
At $1.25 trillion, it would be the largest merger-and-acquisition deal by announced value, topping Vodafone’s $203 billion takeover of Germany’s Mannesmann in 2000, according to data compiled by LSEG.
The combined company is expected to price shares at about $527 each, another person familiar with the matter said. SpaceX was last valued at $800 billion in a recent insider share sale, while xAI was valued at $230 billion in November, the Wall Street Journal reported.
Bloomberg News reported earlier on Monday that SpaceX and xAI would combine ahead of a mega IPO, and said the deal was later confirmed in a statement on SpaceX’s website signed by Musk. Bloomberg
The merger threads Musk’s private businesses closer together, in a web that already includes Tesla, Neuralink and the Boring Company. Musk has a record of such tie-ups, including Tesla’s 2016 stock deal for solar firm SolarCity, and he previously folded X into xAI through a share swap.
“Starlink was already a cash flow engine and now it adds an AI revenue layer,” said Ali Javaheri, a senior emerging spaces analyst at PitchBook. He said Starlink could also become a distribution channel for AI services and data.
Still, the agreement could draw scrutiny over governance, valuation and conflicts of interest, with Musk running several firms and people and technology moving across them. SpaceX also has billions of dollars in federal contracts with NASA and the U.S. Department of Defense, and those agencies and intelligence bodies can review transactions for national security risks.
