SpaceX Acquires xAI in $1.25 Trillion Merger to Integrate Space and Artificial Intelligence
Hawthorne, Tuesday, 3 February 2026.
Valued at $1.25 trillion, this historic consolidation integrates generative AI with aerospace, aiming to launch orbital data centers and redefining the valuation landscape for private technology sectors.
A Consolidation of Titans
In a decisive restructuring of Elon Musk’s business interests, SpaceX officially acquired xAI on February 2, 2026, creating a unified entity valued at $1.25 trillion [1]. The merger agreement, finalized yesterday, values the aerospace leader SpaceX at $1 trillion, while the artificial intelligence venture xAI is valued at $250 billion [1]. Investor Ross Gerber confirmed the transaction after receiving the merger documentation, stating unequivocally that “SpaceX now owns xAI” [1]. This acquisition brings xAI’s proprietary assets, including the Grok chatbot and the social media platform X, under the direct control of SpaceX, following the initial announcement of the merger on February 1 [1].
Orbital Infrastructure for Artificial Intelligence
The strategic rationale behind this high-value consolidation appears to be the physical integration of computational power with orbital capabilities. SpaceX is currently pursuing ambitious plans to deploy data centers and solar-powered satellites in space specifically to power AI systems [1]. This initiative aims to circumvent terrestrial energy limitations and latency issues, a critical move as the cost of AI infrastructure continues to balloon. The scale of capital required for such AI development is further evidenced by broader industry trends; Oracle Corp., for instance, is currently in the process of raising between $45 billion and $50 billion in 2026 through debt and equity to build out its own cloud infrastructure capacity [4]. This context underscores why Musk’s AI ambitions may have grown too costly for xAI to shoulder as a standalone entity [4].
Strategic Prelude to Public Listing
Market analysts view this consolidation not merely as a technological merger but as a calculated step toward a massive financial event. Reports indicate that Musk plans to leverage this combined $1.25 trillion valuation ahead of a “mega IPO,” which would likely be one of the most significant public listings in history [2][3]. The merger consolidates assets and capital requirements, potentially presenting a more robust value proposition to public market investors. This maneuver aligns with the aggressive capitalization seen elsewhere in the tech sector, where demand for AI-related financial instruments remains voracious; Oracle’s recent bond sale, for example, attracted a record $126 billion in orders [4].
Global Markets React with Volatility
The announcement arrives amidst a complex global economic landscape characterized by stabilizing equity markets and surging commodity prices. On February 3, the FTSE 100 index climbed to a fresh record high of 10,362 points, registering a 0.2% daily gain [1]. However, a strong undercurrent of caution persists. Gold prices surged 5.8% to $4,939 per ounce on February 3, marking what is expected to be the metal’s largest daily gain since November 2008 [1]. Similarly, silver prices rebounded to $84.70, up 6.5% as of February 2, following a “metals meltdown” on January 30 that flushed out leveraged speculative positions [1]. This dichotomy of record-breaking equity highs and defensive commodity surges suggests investors are navigating a “freshly cleaned playground” with heightened vigilance [1].