SpaceX has acquired xAI in an all-stock deal that values the combined company at $1.25 trillion, according to internal memos and multiple reports. The transaction values SpaceX at $1 trillion and xAI at $250 billion, marking one of the largest tech acquisitions in history.
The merger consolidates Musk's two most capital-intensive ventures. SpaceX brings launch capabilities and satellite infrastructure through its Starlink constellation, while xAI contributes AI models and data center technology. The combination appears designed to support Musk's stated ambition of building orbital data centers, a concept that would require both entities' capabilities.
The timing is notable. SpaceX has been expanding Starlink while managing development costs for Starship, its next-generation rocket system. xAI, launched in 2023, has been burning capital to compete with OpenAI and Anthropic while building out compute infrastructure. This acquisition provides xAI with SpaceX's balance sheet and potential synergies, though the technical challenges of space-based data centers remain unproven.
The deal precedes a rumored SpaceX IPO that would likely be among the largest public offerings ever. By folding xAI in now, Musk creates a combined entity before public market scrutiny. The $1.25 trillion valuation eclipses most public tech companies, though valuations in private all-stock deals can be negotiable.
For enterprise tech leaders, three things matter here. First, watch whether this consolidation accelerates or delays SpaceX's core satellite internet business. Second, the orbital data center concept, if it materializes, could shift thinking about latency and disaster recovery, though practical implementation is years away. Third, the deal demonstrates how private capital markets continue to support massive valuations in AI infrastructure, even as public market multiples compress.
The all-stock structure keeps the deal private and avoids immediate tax implications. What remains unclear: how this affects xAI's existing enterprise AI products, whether SpaceX customers will be expected to adopt xAI technology, and when either business might actually ship orbital compute infrastructure.
History suggests treating ambitious integration plans with skepticism until hardware ships.