Musk confirms SpaceX merger with xAI ahead of IPO
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Senior Reporter
Updated
Mon, February 2, 2026 at 5:09 PM EST
2 min read
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SpaceX (SPAX.PVT) will merge with xAI (XAAI.PVT) in a deal that consolidates two of Elon Musk's biggest private startups, the space exploration company said in a statement.
"SpaceX has acquired xAI to form 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," Musk said in a statement posted to the SpaceX website. "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!"
The merger was first reported by Bloomberg earlier on Monday.
Musk said the big push behind the merger are data centers in space and space-based AI.
"Current advances in AI are dependent on large terrestrial data centers, 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 ... Space-based AI is obviously the only way to scale," Musk said.
Engineers from Tesla will sometimes work on projects SpaceX, and vice versa, including xAI. Last week Tesla confirmed a $2 billion investment in xAI preferred stock.
As for SpaceX, it is planning an initial public offering that could raise as much as $50 billion, and value the company at about $1.5 trillion, per Bloomberg News. It is unclear how those numbers will change now that xAI is under the SpaceX umbrella.
This story is developing. Check back for updates.
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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