Elon Musk Is Rolling xAI Into SpaceX—Creating the World’s Most Valuable Private Company

Steven

Elon Musk Is Rolling xAI Into SpaceX—Creating the World’s Most Valuable Private Company

Summary

Elon Musk announced that SpaceX is acquiring his AI company xAI and integrating it into the space firm. Musk says terrestrial power limits mean the future of large-scale AI must move off-planet, with satellites and eventually space-based data centres providing the vast power and room needed. The combined entity is reported to be valued at $1.25 trillion, making it the most valuable private company in the world.

SpaceX is reportedly still planning an initial public offering later this year despite the acquisition. The move follows recent financings and valuations: SpaceX insiders were told a deal valued the company at $800 billion, while xAI raised $20 billion last month and was valued at roughly $230 billion. xAI already owns X and has integrated its Grok model into the social platform.

Key Points

  • SpaceX will acquire xAI and fold its AI efforts into the space company, per Musk’s announcement.
  • Musk argues terrestrial electricity limits make space-based AI the long-term solution; satellites and space data centres are the aim.
  • The combined enterprise is reported to be valued at about $1.25 trillion, the largest private-company valuation ever reported.
  • SpaceX’s planned IPO remains on track, according to reporting, even after the consolidation.
  • Recent financings: SpaceX was internally valued at $800 billion in a share-buy deal; xAI raised $20 billion, valuing it at roughly $230 billion before the merger.
  • xAI already controls X (formerly Twitter) and has integrated its Grok model into the platform’s recommendation and features.
  • The acquisition continues Musk’s pattern of consolidating his companies to realise ambitious, cross-company visions—from SolarCity to Neuralink and beyond.

Context and relevance

This deal sits at the intersection of two enormous trends: the relentless growth of AI computing demands and commercial space infrastructure. If Musk realises even parts of the plan—satellite-backed compute or off-world data centres—it would reshape where and how large AI models are run and financed. It also demonstrates how private capital and vertically integrated ownership can accelerate speculative, large-scale infrastructure projects.

Why should I read this?

Because it’s Musk doing what he does best: stitching his companies together into something bigger and bonkers. If you care about where AI runs, who controls the backbone, or how space industry economics might change, this is the sort of consolidation that could shift timelines and money flows. Short version: big valuation, bigger ambition, and potentially real consequences for AI infrastructure and competition.

Source

Source: https://www.wired.com/story/spacex-acquires-xai-elon-musk/