Elon Musk merges SpaceX with xAI at $1.25tn valuation | SpaceX
Elon Musk’s aerospace company SpaceX has acquired his artificial intelligence business xAI, in a $1.25 billion (£910 billion) merger that consolidates part of Elon Musk’s empire as SpaceX prepares to go public later this year.
The two companies announced the deal Monday in a statement on SpaceX’s website, saying the merger would form “the most ambitious, vertically integrated innovation engine on (and off) Earth, featuring AI, rockets, space internet, direct communications to mobile devices, and the world’s first real-time information and free speech platform.”
SpaceX, one of the world’s most valuable private companies, will obtain xAI properties such as its chatbot Grok and social media platform
The deal would have valued SpaceX at $1 trillion and xAI at $250 billion, putting the combined company on track for an IPO valuing it well over $1 trillion. The float is expected to be timed in early summer to coincide with a planetary alignment and Musk’s birthday.
Musk will turn 55 on June 28, around the same time Jupiter and Venus appear near each other.
The deal announcement specifically cited Musk’s plans for space data centers as justification for the deal.
“Current advances in AI depend on large land-based data centers, which require immense amounts of power and cooling. The global electricity demand for AI simply cannot be met with land-based solutions, even in the short term, without imposing hardship on communities and the environment,” the announcement said.
“In the long term, spatial AI is obviously the only way to evolve. »
Musk has increasingly intertwined parts of his business in recent months through transactions and acquisitions. xAI acquired the
SpaceX and xAI have both received staggering valuations over the past year. As SpaceX continues to dominate satellite launches and secure expansive contracts with the U.S. federal government, the company sent a letter to investors in December revealing an expected value of $800 billion for the company.
Despite widespread backlash against xAI’s Grok AI tool due to its promotion of racist ideology and dissemination of false, non-consensual sexualized images of women and children, the artificial intelligence company has also increased its valuation amid the AI boom. It announced a $20 billion Series E fundraising round from major investors last month, which valued the company at $230 billion.
Speculation and leaks about the deal, first reported by Reuters, have increased in recent days. Musk appeared to give vague confirmation of the acquisition earlier Monday, simply writing “yes” in response to an article on X referencing reports of the merger.
The news is a positive diversion for Musk after Tesla released an earnings report last week that showed falling revenue and a struggling auto business. Days later, a Justice Department release of 3 million records linked to sex offender Jeffrey Epstein showed Musk exchanging numerous friendly emails with the disgraced financier and planning to visit his private island. Musk did not respond to The Guardian’s inquiries about Epstein’s latest emails.
He called the publication of the emails a “distraction” for
