Musk’s SpaceX and xAI Merge to Create the World’s Most Valuable Private Company

Elon Musk is further consolidating his business empire. SpaceX has officially acquired xAI, Musk’s artificial intelligence startup best known for its Grok chatbot, in a move that brings several of his most ambitious projects under one roof.

SpaceX confirmed the merger by publishing an internal memo from Musk on its website. While the companies did not disclose financial terms, a source familiar with the deal said xAI was valued at $125bn (£91bn), while SpaceX itself was valued at around $1tn—making it the most valuable private company in the world.

In the memo, Musk described the merger as the creation of an “innovation engine” that combines artificial intelligence, rockets, satellite internet, and media into a single integrated operation.

The deal follows earlier controversy around xAI. Tesla pushed ahead with investing in the AI firm despite objections from some shareholders, who argued that resources were being diverted to yet another Musk-controlled company. In a shareholder vote last year, abstentions and opposition outnumbered approvals.

Meanwhile, SpaceX is also reportedly preparing for a potential public listing. According to Emily Zheng, a senior analyst at PitchBook, the xAI acquisition has all the hallmarks of a company gearing up for an initial public offering (IPO).

“The sheer cost of compute, infrastructure, and energy is why we’re seeing many of venture capital’s most valuable startups prepare to go public,” Zheng said. “By consolidating these businesses ahead of an IPO, SpaceX can present a more differentiated and capital-efficient growth story to public investors.”

An IPO, or Initial Public Offering, is when a private company sells shares to the public for the first time on a stock exchange.

Scaling ambitions beyond Earth

In his memo, Musk also outlined how space could solve the massive energy demands of artificial intelligence.

“In the long term, space-based AI is obviously the only way to scale,” he wrote. While launching AI satellites from Earth will be the immediate focus, Musk said the merger also supports far bigger goals.

“The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars, and ultimately expansion throughout the universe.”

With the xAI merger complete, Neuralink and The Boring Company are now the only smaller Musk ventures that remain outside his larger corporate structures.

The move follows xAI’s acquisition of social media platform X last March in an all-stock deal. At the time, Musk said the merger would “combine the data, models, compute, distribution, and talent” needed to accelerate AI development.