Space-focused equities ticked higher Tuesday after Elon Musk revealed a plan to combine SpaceX with his artificial intelligence venture xAI, valuing the merged company at $1.25 trillion. The announcement prompted gains in multiple small- and mid-cap names tied to commercial space activity.
In premarket trading, Rocket Lab shares increased 3.6%, Planet Labs rose 3.3% and AST SpaceMobile gained 2.5%. Additional names in the sector also advanced, with Intuitive Machines up 1.9% and Redwire climbing 4.9%.
Musk characterized the merger as creating a "vertically integrated and ambitious innovation powerhouse," saying the combined organization would bring together artificial intelligence, rocket technology, space-based internet services, direct-to-mobile communications and a platform for real-time information and free speech.
He also argued that, as major technology companies race toward artificial general intelligence, deploying AI computing capacity in space will become the most cost-effective method within a two- to three-year horizon. The statement frames the transaction as an effort to extend AI infrastructure beyond Earth.
Context and market reaction
The market response Monday and into Tuesday focused on companies whose businesses link to launch services, satellite data and space-based communications. The share movements were modest but broadly positive among the group of publicly traded space companies highlighted in premarket trading.
Investors and market participants are interpreting the merger announcement as a directional signal that could influence demand for launch capacity, satellite services and related hardware, though immediate impacts on fundamentals for individual public companies are not specified in the announcement.
Summary takeaways
- The merger values the combined SpaceX and xAI entity at $1.25 trillion and positions the company to pursue AI infrastructure in space.
- Several public space-related stocks rose in premarket trading, including Rocket Lab, Planet Labs, AST SpaceMobile, Intuitive Machines and Redwire.
- Musk stated that space-based AI compute could be the most cost-effective option within two to three years, linking the deal to the competition toward artificial general intelligence.
Notes on limitations
The announcement outlines strategic intent and a valuation for the combined company, but it does not provide operational details or financial terms beyond the stated $1.25 trillion figure. The timeline and competitive claims reflect the statements attributed to Musk in the announcement.