SpaceX acquires xAI in a move that brings artificial intelligence development directly under the space company. The acquisition was announced by Elon Musk on Monday. xAI becomes a wholly owned subsidiary of SpaceX. The deal aligns Musk’s artificial intelligence and space-related businesses under one corporate structure.
xAI is the company behind the Grok chatbot. It was founded by Musk in 2023. SpaceX is the world’s largest private space launch provider. Musk stated that the transaction is intended to unify AI development with space exploration goals. No financial terms were formally disclosed by the companies.
SpaceX acquires xAI amid reports of trillion-dollar valuation
Reports indicate the combined entity could be valued at approximately US$1.25 trillion. Bloomberg reported that the implied share price could reach about US$527. Reuters previously reported discussions surrounding the transaction before the official announcement.
The acquisition comes as SpaceX prepares for a potential initial public offering later this year. Analysts estimate the IPO could value SpaceX at more than US$1.5 trillion. Neither SpaceX nor xAI immediately responded to media requests for comment following the announcement.
SpaceX acquires xAI following prior Musk company mergers
The deal follows Musk’s earlier consolidation moves. In 2024, Musk merged social media platform X into xAI through a share swap. Musk has previously combined companies across his portfolio. SolarCity was acquired by Tesla in 2016.
Musk also controls Tesla, Neuralink, and The Boring Company. The xAI acquisition further integrates technology development across these businesses. The transaction may face scrutiny related to governance and valuation.
SpaceX acquires xAI while holding major government contracts
SpaceX maintains contracts with NASA, the US Department of Defense, and intelligence agencies. These relationships may trigger regulatory reviews of the acquisition. Government agencies have oversight authority for mergers involving federal contractors.
The acquisition further consolidates Musk’s control over advanced technology platforms spanning AI, aerospace, and satellite communications.