SpaceX and xAI, Mr. Tesla’s $1.25 trillion mega-merger

SpaceX has announced the acquisition of xAI, the artificial intelligence startup founded by Elon Musk, creating a private entity with a combined valuation of $1.25 trillion. The all-stock deal brings together two of the world’s largest privately held companies and aims to support increasingly costly ambitions in space and AI.

The agreement assigns a valuation of $1 trillion to SpaceX and $250 billion to xAI. Employees have reportedly already been informed that shares in the new company will have an indicative value of $526.59 each. Despite the merger, SpaceX continues to look toward Wall Street: an IPO within the year remains on the table, with a potential raise of up to $50 billion - what would be the largest initial public offering in history.

Musk has identified space as the next frontier of computing: within two or three years, he has said, the cheapest AI will be the one developed in orbit. This vision hinges on an extremely ambitious plan: SpaceX has requested authorization to launch up to one million satellites, dramatically expanding the Starlink network, which currently consists of more than 9,000 units.

The merger further strengthens the Musk ecosystem, which in recent years has woven together social media, artificial intelligence, and space. xAI, developer of the Grok chatbot, is burning roughly $1 billion a month, but can now rely on SpaceX’s cash flows - an essential company for NASA and the U.S. Department of Defense and the global leader in space launches.

Despite a rare technical incident involving a Falcon 9 recorded shortly after the announcement, the message to markets is clear: Musk is building a vertically integrated giant capable of dominating the new space and artificial intelligence economy. A titanic bet that could redefine the future of global technology.

Andrea Pelucchi