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 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 Google, Meta, Amazon-backed Anthropic and OpenAI in the AI sector.
The transaction values SpaceX at $1-trillion, and xAI at $250-billion, according to a person familiar with the matter.
Investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI as part of the acquisition, this person said. Some xAI executives may also opt for cash instead of SpaceX stock at $75.46/share, the person said.
“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 new 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 $203-billion in 2000, according to data compiled by LSEG.
‘Muskonomy’
The combined company of SpaceX and xAI is expected to price shares at about $527 each, another person familiar with the matter said. SpaceX was already the world’s most valuable privately held company, last valued at $800-billion in a recent insider share sale. xAI was last valued at $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 $1.5-trillion, two people familiar with the matter said.
Read: SpaceX IPO may be largest in history
SpaceX, xAI and Musk did not immediately respond to requests for comment.
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.
Read: Privacy alarm as SpaceX opens Starlink user data to AI models
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. — Echo Wang, Joey Roulette and Juby Babu, (c) 2026 Reuters
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