Elon Musk announced that SpaceX has acquired his AI startup xAI in a landmark transaction that merges his space and artificial-intelligence ventures. The deal values xAI at $250 billion and SpaceX at $1 trillion, according to a person familiar with the matter. Reuters first reported the agreement last week.
Under the terms described, xAI shareholders will receive 0.1433 shares of SpaceX for each xAI share. Some xAI executives have the option to take cash instead of stock, at $75.46 per share. One person close to the deal said the combined company would price shares at roughly $527 apiece.
Musk framed the move as a continuation of a unified mission linking AI and space exploration, describing it as the next chapter for both companies’ ambitions to expand intelligence and reach beyond Earth.
The transaction sets a new record for the largest M&A deal, topping the $203 billion Vodafone acquisition of Germany’s Mannesmann in 2000, according to LSEG data. Observers note the deal brings together a capital-intensive, chip- and data-center-driven AI developer with a rocket and satellite manufacturer that is also pursuing large-scale data-center capabilities.
Analysts say the acquisition could strengthen SpaceX’s push into data centers and AI infrastructure as it competes with firms such as Google (Alphabet), Meta, Anthropic and OpenAI. xAI’s operating costs are heavily influenced by chips, data centers and energy consumption, areas where SpaceX’s scale and satellite network could offer synergies.
SpaceX was last valued at about $800 billion in an insider share sale, while xAI’s most recent public valuation was roughly $230 billion in November, per the Wall Street Journal. Two people familiar with plans have said SpaceX is preparing for a major public offering this year that could push its market value above $1.5 trillion.
The deal further consolidates Musk’s sprawling business interests into an integrated ecosystem—often dubbed the “Muskonomy”—which already includes Tesla, Neuralink and the Boring Company. Musk previously merged social platform X into xAI via a share swap to give the AI firm access to X’s data and distribution; in 2016 he used Tesla stock in the acquisition of SolarCity.
Regulators and investors are likely to scrutinize the merger for governance issues, valuation, conflicts of interest, and the potential transfer of personnel, proprietary technology and contracts across entities. SpaceX holds significant federal contracts with NASA, the Department of Defense and intelligence agencies, and such contracts can trigger national-security reviews of mergers and acquisitions.
SpaceX, xAI and Musk did not immediately comment on the deal when approached for reaction.
