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What is the story about?
SpaceX has formally acquired Elon Musk’s AI company xAI in a landmark move reshaping the future of space and artificial intelligence. The company announced the integration on Monday, February 2, ahead of a major initial public offering planned later this year.
In a brief update posted on its website, SpaceX said the move brings xAI’s advanced artificial intelligence capabilities into the SpaceX ecosystem, aligning the companies’ long-term missions to advance human progress through technology.
According to the statement, the integration is aimed at combining SpaceX’s expertise in rockets, satellites, and space systems with xAI’s work in artificial intelligence, allowing for deeper collaboration across engineering, research, and mission-critical applications.
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SpaceX said the companies already share a common vision under founder Elon Musk, and the announcement formalises their alignment as they work toward building technologies that can operate at scale, both on Earth and beyond.
According to Reuters, the combined entity is valued at roughly $1.25 trillion, with SpaceX’s stake alone estimated at $1 trillion and xAI’s business valued at around $250 billion, making it one of the largest private technology mergers in history. Shares are expected to be priced in an IPO anticipated in mid-2026, potentially topping previous private market valuations.
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The deal unites one of the world’s leading private spaceflight firms with a rapidly expanding AI developer, creating what SpaceX described as a "vertically integrated" innovation powerhouse spanning rockets, satellite communications, artificial intelligence and space-based data infrastructure.
Musk has positioned the deal as part of a longer-term strategy, aimed at shifting data-centre infrastructure to space. SpaceX also recently sought authorisation from the Federal Communications Commission to deploy up to one million satellites as part of what it describes as “orbital data centres.”
In a post on Monday, Musk wrote, "My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space."
He added, "This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and the invention of technologies to benefit humanity."
The acquisition follows a series of moves to consolidate Musk’s technology ventures. Early last year, Musk expanded xAI by merging it with his social media platform X, formerly known as Twitter, allowing the AI company to tap into the platform’s vast real-time data stream and user base.
The integration was aimed at accelerating the development and deployment of xAI’s products, including its chatbot Grok, while deepening the links between Musk’s social media and artificial intelligence ambitions.
SpaceX added that further updates on how the integration will be implemented will be shared in due course.
In a brief update posted on its website, SpaceX said the move brings xAI’s advanced artificial intelligence capabilities into the SpaceX ecosystem, aligning the companies’ long-term missions to advance human progress through technology.
According to the statement, the integration is aimed at combining SpaceX’s expertise in rockets, satellites, and space systems with xAI’s work in artificial intelligence, allowing for deeper collaboration across engineering, research, and mission-critical applications.
Read more: Elon Musk wants to bring the biggest IPO of all time in 2026 - will he succeed?
SpaceX said the companies already share a common vision under founder Elon Musk, and the announcement formalises their alignment as they work toward building technologies that can operate at scale, both on Earth and beyond.
SpaceX
has acquired xAI, forming one of the most ambitious, vertically integrated innovation engines on (and off) Earth → https://t.co/3ODfcYnqfg pic.twitter.com/el40rCUBGe
— SpaceX (@SpaceX) February 2, 2026
According to Reuters, the combined entity is valued at roughly $1.25 trillion, with SpaceX’s stake alone estimated at $1 trillion and xAI’s business valued at around $250 billion, making it one of the largest private technology mergers in history. Shares are expected to be priced in an IPO anticipated in mid-2026, potentially topping previous private market valuations.
Read more: Elon Musk is stressing robots over cars. Here are three humanoid parts suppliers that Morgan Stanley recommends
The deal unites one of the world’s leading private spaceflight firms with a rapidly expanding AI developer, creating what SpaceX described as a "vertically integrated" innovation powerhouse spanning rockets, satellite communications, artificial intelligence and space-based data infrastructure.
Musk has positioned the deal as part of a longer-term strategy, aimed at shifting data-centre infrastructure to space. SpaceX also recently sought authorisation from the Federal Communications Commission to deploy up to one million satellites as part of what it describes as “orbital data centres.”
In a post on Monday, Musk wrote, "My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space."
He added, "This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and the invention of technologies to benefit humanity."
The acquisition follows a series of moves to consolidate Musk’s technology ventures. Early last year, Musk expanded xAI by merging it with his social media platform X, formerly known as Twitter, allowing the AI company to tap into the platform’s vast real-time data stream and user base.
The integration was aimed at accelerating the development and deployment of xAI’s products, including its chatbot Grok, while deepening the links between Musk’s social media and artificial intelligence ambitions.
SpaceX added that further updates on how the integration will be implemented will be shared in due course.
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