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Elon Musk said on Monday that SpaceX has acquired his artificial intelligence startup xAI in a landmark transaction that brings together Musk’s space, satellite and AI ambitions under a single corporate umbrella.
He, however, did not disclose the financials of the deal.
The deal, first reported by Reuters last week, ranks as the largest merger and acquisition transaction ever recorded, surpassing the $203 billion Vodafone–Mannesmann takeover completed in 2000, according to LSEG data. It combines the world’s most valuable private space company with a rapidly growing AI developer behind the Grok chatbot.
According to the report, the transaction values SpaceX at about $1 trillion and xAI at roughly $250 billion. Under the terms of the deal, xAI investors will receive 0.1433 shares of SpaceX for every xAI share they hold. Some xAI executives may opt to receive cash instead, priced at $75.46 per share.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission,” Musk said in a post, adding that the combined entity would pursue large-scale ambitions spanning artificial intelligence and space exploration.
The tie-up is among the most unconventional deals in the technology sector, linking a space and defence contractor with an AI company whose costs are driven by advanced chips, data centres and energy consumption. Analysts say the acquisition could strengthen SpaceX’s data-centre and computing ambitions as Musk competes with AI rivals backed by Alphabet, Meta Platforms, Amazon, Anthropic and OpenAI.
People familiar with the deal cited by the report said the combined SpaceX–xAI entity is expected to price shares at around $527 each. SpaceX was already the world’s most valuable privately held company, last valued at about $800 billion during a recent insider share sale. xAI was last valued at around $230 billion in November, according to media reports.
The merger comes as SpaceX is preparing for a potential blockbuster initial public offering later this year, which could value the company at more than $1.5 trillion, two people familiar with the plans said.
The acquisition further consolidates Musk’s business interests into what some investors describe as a tightly integrated ecosystem that also includes Tesla, Neuralink and the Boring Company. Musk has previously merged his ventures, including folding social media platform X into xAI last year and acquiring SolarCity using Tesla stock in 2016.
The deal is likely to draw scrutiny from regulators and investors over governance, valuation and potential conflicts of interest, given Musk’s overlapping leadership roles and the movement of talent and technology between his companies. SpaceX also holds billions of dollars in contracts with NASA, the US Department of Defense and intelligence agencies, all of which may review the transaction for national security and compliance considerations.
Despite potential regulatory hurdles, the acquisition signals Musk’s intent to tightly align AI development with SpaceX’s long-term technological and strategic roadmap.
The deal, first reported by Reuters last week, ranks as the largest merger and acquisition transaction ever recorded, surpassing the $203 billion Vodafone–Mannesmann takeover completed in 2000, according to LSEG data. It combines the world’s most valuable private space company with a rapidly growing AI developer behind the Grok chatbot.
According to the report, the transaction values SpaceX at about $1 trillion and xAI at roughly $250 billion. Under the terms of the deal, xAI investors will receive 0.1433 shares of SpaceX for every xAI share they hold. Some xAI executives may opt to receive cash instead, priced at $75.46 per share.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission,” Musk said in a post, adding that the combined entity would pursue large-scale ambitions spanning artificial intelligence and space exploration.
The tie-up is among the most unconventional deals in the technology sector, linking a space and defence contractor with an AI company whose costs are driven by advanced chips, data centres and energy consumption. Analysts say the acquisition could strengthen SpaceX’s data-centre and computing ambitions as Musk competes with AI rivals backed by Alphabet, Meta Platforms, Amazon, Anthropic and OpenAI.
People familiar with the deal cited by the report said the combined SpaceX–xAI entity is expected to price shares at around $527 each. SpaceX was already the world’s most valuable privately held company, last valued at about $800 billion during a recent insider share sale. xAI was last valued at around $230 billion in November, according to media reports.
The merger comes as SpaceX is preparing for a potential blockbuster initial public offering later this year, which could value the company at more than $1.5 trillion, two people familiar with the plans said.
The acquisition further consolidates Musk’s business interests into what some investors describe as a tightly integrated ecosystem that also includes Tesla, Neuralink and the Boring Company. Musk has previously merged his ventures, including folding social media platform X into xAI last year and acquiring SolarCity using Tesla stock in 2016.
The deal is likely to draw scrutiny from regulators and investors over governance, valuation and potential conflicts of interest, given Musk’s overlapping leadership roles and the movement of talent and technology between his companies. SpaceX also holds billions of dollars in contracts with NASA, the US Department of Defense and intelligence agencies, all of which may review the transaction for national security and compliance considerations.
Despite potential regulatory hurdles, the acquisition signals Musk’s intent to tightly align AI development with SpaceX’s long-term technological and strategic roadmap.
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