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Reuters

Elon Musk said on Monday that SpaceX has acquired his artificial-intelligence ‍start-up xAI in a record-setting deal that unifies Musk’s AI and space ambitions by combining the rocket-and-satellite company with the maker of the Grok chatbot.
The deal, first reported by Reuters last week, represents one of the most ambitious tie-ups in the technology sector yet, combining a space-and-defence contractor with a fast-growing AI developer ⁠whose costs are largely driven by chips, data centres and energy.
It could also bolster SpaceX’s data-centre ambitions as Musk competes with rivals like Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI in the AI sector.
The transaction values SpaceX at US$1 trillion, and xAI at US$250 billion, according to a person familiar with the matter.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling ‍to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!” Musk said.
The purchase of ‍xAI sets a record for the world’s largest M&A deal, a distinction held for more than 25 years when Vodafone bought Germany’s Mannesmann in a hostile takeover valued at US$203 billion in 2000, according to ‌data compiled by LSEG.

The combined company of SpaceX and xAI is expected to price shares at about US$527 each, another person familiar with the matter said. ‍SpaceX was already the world’s most valuable privately held company, last valued at US$800 billion in a recent insider share sale.
XAI was last valued at US$230 billion in November, according to the Wall Street Journal. The merger comes as the space company plans a blockbuster public offering this year that could value it at over US$1.5 trillion, two people familiar ‌with the ⁠matter said.
The deal further consolidates Musk’s far-flung business empire and fortunes into a tighter, mutually reinforcing ecosystem – what some investors and analysts informally call the “Muskonomy” – which already includes Tesla, brain-chip maker Neuralink and tunnel firm the Boring Company.
The world’s richest man has a history of merging his ventures together. Musk folded social media platform X ‌into xAI through a share swap last year, giving the AI start-up access to the platform’s data and distribution. In 2016, he used Tesla’s stock to buy his solar-energy company SolarCity.
The agreement could draw scrutiny from regulators and investors over ‌governance, valuation and conflicts of ‌interest given Musk’s overlapping leadership roles across multiple firms, as well as the potential movement of engineers, proprietary technology and contracts between entities.
SpaceX also holds billions of dollars in federal contracts with Nasa, the Department of Defence and intelligence agencies, which all have some authority to review M&A transactions for national security and other risks.


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SpaceX

Elon Musk merges xAI into SpaceX in record-setting deal

SpaceX’s Falcon 9 rocket after launching from Cape Canaveral, Florida in February 2025. Photo: Reuters 

Elon Musk at last month’s World Economic Forum in Davos, Switzerland. Photo: AP

EU opens probe into Elon Musk’s Grok over sexual AI deepfakes

The EU will investigate Elon Musk’s Grok chatbot for allegedly sharing illegal content, risking a hefty fine. Photo: TNS

A billboard in London urges the UK Prime Minister to ban X and Grok after reports that Grok generated sexualised images of minors. Photo: Reuters

Elon Musk to open source X algorithm in 7 days amid global scrutiny

Musk has promised in recent years to make some of X’s algorithms public. Photo: dpa

Elon Musk is the founder of xAI, which has developed the Grok chatbot. Photo: AFP

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A United Launch Alliance Atlas V rocket lifts off carrying Amazon’s Project Kuiper internet network satellites from the Cape Canaveral Space Force Station in Florida in April 2025. Photo: Reauters

A string of SpaceX Starlink satellites passes over an old stone house near Florence, Kansas, in 2021. Photo: AP

Musk’s Grok barred from undressing AI images after global backlash

Grok has been allowing users to manipulate images of women and children to sexualise them. Photo: dpa

A poster in London calling for X users to delete their accounts. Photo: AFP

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The deal is the biggest M&A transaction of all time, with a combined company valuation of US$1.25 trillion


The deal is the biggest M&A transaction of all time, with a combined company valuation of US$1.25 trillion.


Elon Musk merges xAI into SpaceX in record-setting deal

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The deal is the biggest M&A transaction of all time, with a combined company valuation of US$1.25 trillion

The deal is the biggest M&A transaction of all time, with a combined company valuation of US$1.25 trillion