SpaceX Acquires xAI in Record Deal, Unifying Musk’s AI and Space Ventures
- tech360.tv
- 2 hours ago
- 2 min read
SpaceX has acquired artificial-intelligence startup xAI in a record-setting deal, announced by Chairman Elon Musk. This move unifies Mr Musk’s artificial intelligence and space ambitions, combining the rocket-and-satellite company with the maker of the Grok chatbot.
The transaction represents one of the most ambitious technology sector tie-ups yet, bringing together a space-and-defence contractor with a fast-growing AI developer. XAI’s operational costs are largely driven by chips, data centres, and energy consumption.
The acquisition could also bolster SpaceX’s data-centre ambitions. Chairman Musk competes with rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic, and OpenAI in the artificial intelligence sector.
A person familiar with the matter stated the transaction values SpaceX at $1 trillion and xAI at $250 billion. This acquisition marks a new record for the world’s largest merger and acquisition deal.
The previous record, held for more than 25 years, was when Vodafone acquired Germany’s Mannesmann in 2000 for $203 billion, according to data compiled by LSEG.
Chairman Musk commented, "This marks not just the next chapter, but the next book in SpaceX and xAI's mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!"
Another person familiar with the matter indicated that the combined company of SpaceX and xAI is expected to price shares at about $527 each. SpaceX was already the world’s most valuable privately held company.
SpaceX was last valued at $800 billion in a recent insider share sale. XAI was last valued at $230 billion in November, according to the Wall Street Journal.
The merger comes as the space company plans a blockbuster public offering that could value it at over $1.5 trillion. Two people familiar with the matter shared this information.
The deal further consolidates Chairman Musk’s business empire and fortunes into a tighter, mutually reinforcing ecosystem. This structure is informally known by some investors and analysts as the "Muskonomy."
His other ventures include electric vehicle maker Tesla, brain-chip manufacturer Neuralink, and tunnel firm The Boring Company. Chairman Musk has a history of merging his ventures together.
He folded social media platform X into xAI through a share swap last year, giving the artificial intelligence startup access to the platform’s data and distribution.
In 2016, Mr Musk used Tesla’s stock to acquire his solar-energy company SolarCity.
The agreement could attract scrutiny from regulators and investors regarding governance, valuation, and potential conflicts of interest. This concern arises given Chairman Musk’s overlapping leadership roles across multiple firms.
Potential movement of engineers, proprietary technology, and contracts between entities also raises questions. SpaceX holds billions of dollars in federal contracts with NASA, the Department of Defence, and intelligence agencies.
These organisations all possess some authority to review merger and acquisition transactions for national security and other risks.
SpaceX has acquired artificial-intelligence startup xAI in a record-setting merger and acquisition deal.
The acquisition unifies Chairman Elon Musk’s artificial intelligence and space ambitions, integrating the rocket-and-satellite company with the Grok chatbot maker.
SpaceX is valued at SGD 1.35 trillion, and xAI at SGD 337.5 billion, setting a new global record for M&A transactions.
Source: REUTERS
