Elon Musk confirmed on Monday that SpaceX has acquired xAI, the artificial intelligence start-up he helped form, in a deal that merges his space and AI efforts. Insiders described the transaction as record-setting and among the more ambitious consolidations in the technology industry, putting a $1 trillion valuation on SpaceX and $250 billion on xAI.
The combined entity will marry SpaceX’s rocket and satellite business with xAI, the developer of the Grok chatbot. Officials and media reports have framed the acquisition as strengthening Musk’s position in data-center capacity and infrastructure as competitive pressure in artificial intelligence builds from rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI.
Company snapshots
- SpaceX
- Founded: 2002
- Founder: Elon Musk
- Key executives: Elon Musk, CEO; Bret Johnsen, CFO; Gwynne Shotwell, President and COO
- Headquarters: Starbase, Texas
- Valuation: $1 trillion in the SpaceX-xAI deal
- Financials: SpaceX generated about $8 billion in profit on $15 billion-$16 billion of revenue last year, according to reports
- Funding and public plans: SpaceX plans to go public sometime this year, according to media reports. Based on its most recent financials, some banks estimate the company could raise more than $50 billion at a valuation exceeding $1.5 trillion.
- xAI
- Founded: 2023
- Founding team: Elon Musk; former Google DeepMind engineer Igor Babuschkin; former Microsoft executive Greg Yang; former Google research scientists Christian Szegedy and Tony Wu
- Key executives: Elon Musk, CEO; Anthony Armstrong, CFO
- Headquarters: Palo Alto, California
- Valuation: $250 billion in the SpaceX-xAI deal
- Prior valuations and financials: The startup was previously valued in secondary transactions and share sales; its net loss widened to $1.46 billion in the September quarter from $1 billion in the prior quarter, and revenue nearly doubled to $107 million. Last month, xAI said it raised $20 billion in an upsized Series E funding round, with reported participation from Valor Equity Partners, StepStone Group, Fidelity Management & Research Company and Qatar Investment Authority.
Context and immediate implications
The acquisition is positioned as a strategic step to align satellite and launch capabilities with artificial intelligence development and deployment. Observers quoted in media coverage have framed the deal as a way to bolster Musk’s ambitions for data-center and infrastructure growth while the AI market intensifies among major technology players. The move brings together a profitable launch and satellite operator with a rapidly scaling AI startup that has reported widening quarterly losses alongside accelerating revenue growth.
Details on integration, timelines and specific operational changes were not disclosed in the announcement. The combined valuation figures were provided by a person familiar with the matter and reported alongside the transaction confirmations.
What remains unclear
- The precise terms of integration and the timeline for combining SpaceX and xAI operations were not detailed in the announcement.
- How the transaction will affect regulatory, funding or public offering plans for either entity has not been outlined.