Elon Musk Combines SpaceX with his AI Venture xAI in a Strategic Merge

Elon Musk has merged SpaceX with his artificial intelligence company xAI, combining two of his largest private ventures in a deal that significantly reshapes the structure of his business empire and strengthens plans for a future initial public offering (IPO).

The transaction, announced on 2 February 2026, brings xAI under the ownership of SpaceX.

The combined group is valued at about $1.25 trillion, according to people familiar with the deal. SpaceX is estimated at roughly $1 trillion, while xAI is valued at around $250 billion.

As part of the merger, xAI shareholders will receive 0.1433 SpaceX shares for each xAI share, with some investors offered a cash alternative.

• Elon Musk merges SpaceX with xAI to streamline operations ahead of anticipated IPO
• The $1.25 trillion SpaceX-xAI merger strengthens Musk’s control over aerospace and AI ventures
• SpaceX’s merger with xAI enhances satellite and AI integration, diversifying revenue for future IPO

xAI, founded in 2023, develops Grok chatbot technology, which is integrated into the social media platform X, also controlled by Musk. By folding xAI into SpaceX, Musk consolidates his interests in aerospace, satellite communications, artificial intelligence, and social media under a single corporate structure.

SpaceX executives said the merger will allow closer coordination between xAI and Starlink satellite internet, SpaceX’s broadband business. The company plans to explore placing data centres in space, using solar power to address rising energy and cooling costs associated with large-scale computing infrastructure on Earth.

The deal comes as SpaceX prepares for a possible SpaceX IPO, widely expected to be one of the largest in history. Analysts say the addition of xAI could make SpaceX more attractive to investors by diversifying revenue streams beyond launch services and satellite connectivity.

Regulatory scrutiny is expected, given SpaceX’s extensive government contracts and the increasing attention paid to artificial intelligence systems. xAI has previously faced criticism over content generated by Grok, raising questions about oversight and governance following the merger.

Also Read: Indonesia Restores Access to Musk’s Grok AI Under Strict Conditions

The consolidation marks another step in Musk’s effort to streamline control over his companies while positioning SpaceX as the central vehicle for his commercial operations.