Elon Musk’s Rocket Company space exploration technologies corp. have obtained xAI, the artificial intelligence company Musk founded three years ago, merged two private companies into a company valued at $1.25 trillion in a massive and unconventional deal and plans a historic IPO this year.
Musk is CEO of two companies as well as publicly traded electric car and robotics companies Tesladescribing the combination as “one that will form the most ambitious, vertically integrated innovation engine on Earth (and beyond), including artificial intelligence, rocketry, space-based internet, direct-to-mobile communications, and the world’s foremost platform for real-time information and free speech,” he writes in the book A blog post on the SpaceX website.
Musk cited the potential of space-based data centers, the energy-intensive computing facilities needed to power artificial intelligence services, as one of the most important benefits of this combination, although the concept is unproven and largely theoretical. “Even in the short term, the power needs of global AI simply cannot be met by terrestrial solutions,” Musk wrote in a blog post.
“By directly harnessing near-constant solar energy with minimal operating or maintenance costs, these satellites will transform our ability to scale computing,” Musk wrote.
While reports of the potential deal emerged last week, the high value of the deal and the speed with which it was completed left many industry observers in awe, underscoring huge expectations for artificial intelligence and concerns that overheating markets may require a liquidation.
It is reported BloombergThe deal between SpaceX and xAI would result in a total enterprise value of $1.25 trillion, with xAI stock worth $526.59 per share. Musk has reportedly been discussing potential terms for SpaceX’s IPO this year Pay attention to the company $800 billion, setting the stage for the largest initial public offering ever.
Representatives for SpaceX and xAI did not immediately respond to requests for comment.
Musk has a history of mixed assets
Musk is the world’s richest man and has a history of mixing financial interests in his businesses. In 2015, Tesla acquired Solar City, a solar company founded by Musk’s cousins and for which Musk serves as chairman of the board.
In March 2025, xAI acquired Musk-owned social platform X (formerly Twitter) in an all-stock deal worth $33 billion. “The future of xAI and X are intertwined,” Musk said at the time.
Recently, Tesla surprise shareholders Just last month, it revealed it had invest xAI spends US$2 billion in exchange for a batch of preferred shares as part of xAI’s US$20 billion Series E financing Financing round. The investment means Tesla shareholders now own preferred stock in a company that has become a subsidiary of SpaceX, which could raise questions among investors about Tesla’s role in funding xAI’s growth. In addition to the $2 billion investment, Tesla also revealed that it sold $430 million worth of Megapack battery storage and systems to xAI in 2025 for $285 million, reflecting the circular nature of Musk’s business.
What about Gronk?
Musk Founded xAI in 2023, The stated goal is to create an artificial intelligence that he describes as “truth-seeking” and with “rebellious tendencies.” Since then, the company’s Grok chatbot has caused controversy, most recently Blocked in some countries Used to create sexy deepfake images of women.
Musk didn’t mention Grok at all in Monday’s post announcing xAI’s merger with SpaceX, instead focusing on his vision to dramatically expand the capabilities of artificial intelligence technology unencumbered by the limitations of Earth. “I mean, space is called ‘space’ for a reason,” Musk wrote, emphasizing his point with a dumbfounding emoji.
“This marks not only the next chapter, but the next book in SpaceX and xAI’s mission: to make a sentient sun by extension to understand the universe and extend the light of consciousness to the stars!” Musk wrote.
Musk said his estimate for the next two to three years is that the cheapest way to generate AI computing will be in space, with “innovative companies” rapidly accelerating their breakthroughs.
Musk concluded: “The capabilities we unlock by making space-based data centers a reality will fund and support self-development bases on the moon, entire civilizations on Mars, and ultimately expand into the universe.”