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HighlightsSpaceX valued at $1tn acquires xAI worth $250bn in massive consolidation of Musk businesses.Combined company targeting summer stock market debut coinciding with planetary alignment and Musk's birthday.Deal centres on ambitious plans for space-based datacentres to power artificial intelligence systems.Elon Musk's aerospace company SpaceX has acquired his artificial intelligence business xAI in a $1.25 tn (£910 bn) merger that consolidates major parts of the billionaire's empire as SpaceX prepares for a public listing later this year.The companies announced the deal on Monday via SpaceX's website, describing it as forming "the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world's foremost real-time information and free speech platform."SpaceX, among the world's most valuable private companies, gains xAI properties including the Grok chatbot and social media platform X. The deal reportedly valued SpaceX at $1 tn and xAI at $250 bn, positioning the combined entity for a stock market flotation exceeding $1 tn valuation.Space-based AI visionThe announcement specifically cited Musk's plans for space-based datacentres as primary justification for the acquisition, stating: "Current advances in AI are dependent on large terrestrial datacentres, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment. In the long term, space-based AI is obviously the only way to scale. "The flotation is expected in early summer, timed to coincide with a planetary alignment when Jupiter and Venus appear in close proximity, around Musk's 55th birthday on June (28).Musk has increasingly intertwined his various businesses through recent deals and acquisitions. xAI acquired platform X in an all-stock transaction in early 2025, while Tesla revealed last month it planned to invest $2 bn in xAI.Valuation surgeBoth companies have received staggering valuations recently. SpaceX, which dominates satellite launches and holds extensive US federal government contracts, sent investors a December letter revealing an expected $800 bn valuation. xAI announced a $20 bn Series E fundraising last month from major investors, valuing the company at $230 bn.The merger news provides positive distraction for Musk following Tesla's recent earnings report showing declining revenues and struggling car sales. Days later, Department of Justice files related to sex offender Jeffrey Epstein revealed Musk exchanging friendly emails with the disgraced financier and planning to visit his private island.Musk called the email release a "distraction" on X, claiming awareness that "some email correspondence with him could be misinterpreted and used by detractors to smear my name."
