Elon Musk has taken a significant step towards consolidating his technology empire, with SpaceX acquiring artificial intelligence start-up xAI in a deal that values the combined group at approximately US$1.25 trillion, according to media reports. The transaction brings together Musk’s rocket and satellite operations with his fast-growing AI ambitions, signalling a bold new phase in the global race for artificial intelligence dominance.
According to some media sources, the acquisition values xAI at around US$250 billion based on a recent funding round, while SpaceX’s internal valuation has reportedly been lifted to US$1 trillion, supported by strong revenue growth from its Starlink satellite broadband business. SpaceX was previously valued closer to US$800 billion in secondary market transactions.
Under the deal structure, xAI shareholders are expected to receive SpaceX shares, effectively folding the AI company into the space and satellite giant. Executives have indicated that the merged entity’s shares would be priced at a premium level, reflecting expectations of rapid growth across both space infrastructure and AI capabilities.
The merger comes as SpaceX continues preparations for a potential initial public offering (IPO), which could take place as early as mid-2026, subject to regulatory approvals and market conditions. If it proceeds, the IPO could raise as much as US$50 billion, potentially making it the most extensive public listing in history.
Strategically, the transaction underscores Musk’s belief that future AI development will require vast computing power, far beyond what traditional, earth-based data centres can sustainably provide. He has repeatedly argued that orbital or space-based data centres could help address rising electricity demand while reducing environmental strain on terrestrial infrastructure.
The move also reflects broader consolidation across Musk’s businesses. xAI already has close ties with the social media platform X, which provides large volumes of real-time data for training AI models, including the Grok chatbot. Tesla has also recently disclosed investments in xAI, fuelling speculation that Musk may eventually integrate more of his companies under a unified technology and AI strategy.
For investors, this deal highlights the accelerating convergence of space technology, artificial intelligence, energy infrastructure, and data services—themes that are increasingly shaping global markets. While SpaceX and xAI remain private, their scale and ambition are influencing listed technology, semiconductor, satellite, and AI-related stocks worldwide, including those on the ASX.
As the AI arms race intensifies, Musk’s vision of combining space infrastructure with next-generation computing places SpaceX-xAI at the centre of one of the most ambitious technology bets of the decade.
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