Elon Musk Brings xAI Into SpaceX in $1.25 Trillion Technology Merger

In the SpaceX case, the leader of the company called SpaceX, Elon Musk, is joining a different company named xAI in a merger worth 1.25 trillion.

According to the news reports, Elon Musk has consolidated his aerospace firm SpaceX with his artificial intelligence start-up xAI in one of the biggest personal technology transactions in history, with a valuation of about USD 1.25 trillion.

SpaceX announced the acquisition on Monday, and his comment on the deal was located by the rocket maker and shared on his X social media platform.

Reporting by CNBC stated that the merger was finalised on Monday, and reporting in Bloomberg stated that the resultant company is worth USD 1.25 trillion, which is before a possible initial public offering towards the end of this year.

The estimated value of SpaceX in the merged entity is USD 1 trillion, and xAI is USD 250 billion.

Before this tremendous proposed IPO, Musk is combining his space exploration and artificial intelligence projects under one company, which is set to be launched later this year.

How xAI Became Part of SpaceX’s Bigger Play

Musk had previously acquired xAI last year under the name X, the former Twitter.

Consequently, xAI is the owner and operator of the social media platform, on top of its core product, an AI chatbot called Grok. In the European Union, Grok is already under investigation regarding its image generation AI-powered feature, whereby it has been suspected of being used to generate sexualised images.

The xAI has been quoted as having placed restrictions on the Grok users which restricts the editing of images.

Under this merger, some of the businesses that Musk owns are combined under a single roof, which includes the Grok chatbot, the rocket services of SpaceX, its satellite communications division Starlink, and the social media platform X.

Blending AI, Space, and Platforms

In his note about the merger between SpaceX and xAI, Musk indicated that bringing the two together would create an innovation engine that would bring together AI, rockets, space-based internet, and media.

“This is the beginning not only of another chapter but also of another book in the mission of SpaceX and xAI: extending to the stars by scaling to a sentient sun in order to learn the universe and bring the light of consciousness there!” Musk said.

In an update of the SpaceX website on February 2, Musk said the combined company would be the most ambitious and vertically integrated engine of innovation, saying again that it would not only be the next chapter but the next book of the mission of SpaceX and xAI.

Why Space-Based AI Compute Is Central to the Merger

The merger will one day in the future enable placement of AI data centres in space, which will be solar powered, as suggested in a SpaceX press release.

“The cheapest way to achieve AI compute will be in space, in 2 to 3 years,” said Musk.

This cost-efficiency will be sufficient by itself to allow innovative business entities to advance to the next level of training their AI models and processing information at unparalleled speeds and scale, which will allow us to make breakthroughs in our knowledge of physics and develop technologies to benefit humanity.

He also noted that this new constellation will be based on the space sustainability design and operation strategies that have been proven successful in the existing broadband satellite systems at SpaceX.

SpaceX has made the merger decision after last week submitting an official request to the US Federal Communications Commission to launch and operate a constellation of up to one million satellites intended to be orbital data centres with unparalleled computing power to support more advanced AI models and applications.

Musk has often commented on why he needed to quicken the process of making technology that will enable data centres to run in space possible, and he has indicated that it is possibly now easier to accomplish due to the combined company format.