Elon Musk announced on Monday that SpaceX has acquired his artificial intelligence startup xAI, uniting his space and AI ventures in a landmark transaction.
The deal, first reported by Reuters, brings together SpaceX’s rocket and satellite operations with xAI, the developer behind the Grok chatbot. It marks one of the most ambitious mergers in modern technology history.
Sources familiar with the transaction said the deal values SpaceX at $1 trillion and xAI at $250 billion. The acquisition sets a new global record for the largest merger and acquisition deal, surpassing Vodafone’s $203 billion takeover of Mannesmann in 2000.
The combined entity is expected to price shares at approximately $527 per share, according to another source. SpaceX was previously valued at $800 billion during a recent insider share sale. xAI last carried a valuation of $230 billion in November.
SpaceX has acquired xAI, forming one of the most ambitious, vertically integrated innovation engines on (and off) Earth → https://t.co/3ODfcYnqfg pic.twitter.com/el40rCUBGe
— SpaceX (@SpaceX) February 2, 2026Strategic Push Into AI Infrastructure
The merger strengthens SpaceX’s ambitions in data centres, computing power, and energy-intensive AI development. xAI’s operating costs largely stem from chips, data centres, and electricity, areas where SpaceX’s satellite network and launch capabilities could offer long-term advantages.
Musk is competing directly with AI rivals such as Google, Meta, OpenAI, and Amazon-backed Anthropic.
BREAKING: SpaceX has just filed to merge with xAI, with @xai now falling under the ownership of @SpaceX.
This is an expected prerequisite to greater AI-related activities, with the company having recently filed for approval to launch a million "datacenter" satellites. pic.twitter.com/gqIrVW9F37
— IGW (@interstellargw) February 2, 2026“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 together.
IPO Plans and the ‘Muskonomy’
The deal comes as SpaceX prepares for a potential initial public offering later this year. Sources said the IPO could value the company at more than $1.5 trillion, making it one of the largest public listings in history.
The acquisition further consolidates Musk’s broader business ecosystem, which includes Tesla, Neuralink, and The Boring Company. Analysts often refer to this interconnected structure as the “Muskonomy.”
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Musk has pursued similar strategies before. He merged social media platform X into xAI last year through a share swap. In 2016, he used Tesla stock to acquire solar firm SolarCity.
The transaction may attract regulatory and investor scrutiny. Analysts point to governance concerns, valuation questions, and potential conflicts of interest due to Musk’s overlapping leadership roles.
SpaceX also holds billions of dollars in U.S. federal contracts with NASA, the Department of Defense, and intelligence agencies. These entities retain authority to review major mergers for national security and compliance risks.
