Elon Musk’s SpaceX acquires xAI

CALIFORNIA: Elon Musk is tightening his grip on his sprawling business empire. SpaceX is taking over his artificial intelligence start-up xAI, bringing rockets, AI, space internet and media under one roof.

SpaceX confirmed the acquisition in a memo from Musk, who cast the merger as an “innovation engine” spanning multiple frontier technologies. Terms were not disclosed, but a source familiar with the deal pegged xAI’s value at $125bn and SpaceX at $1tn, a level that would make the rocket firm the most valuable private company on the planet.

The move follows Tesla’s $2bn investment in xAI last month. Musk told Tesla investors he sees xAI as an “orchestra conductor” for factories filled with autonomous robots. He also signalled a sharp turn in strategy, saying Tesla would halt two car models to prioritise robot production, one of the company’s boldest pivots yet. Not all investors were convinced. In a prior shareholder vote, abstentions and votes against such moves outnumbered those in favour.

Speculation is also building around a SpaceX listing. Emily Zheng, senior analyst at Pitchbook, says the xAI deal bears the hallmarks of IPO preparation. The soaring cost of compute, infrastructure and energy is pushing capital-hungry tech firms towards public markets. Consolidation, she argues, helps craft a capital-efficient growth story for investors.

Musk’s ambitions stretch well beyond balance sheets. In the memo, he argued that space is the long-term answer to AI’s energy appetite. Launching AI satellites is the near-term goal; space-based data centres, he wrote, could bankroll self-sustaining Moon bases and a civilisation on Mars.

xAI itself has had a busy life. It began as a segment of X after Musk bought the platform in 2022, using its real-time data to train AI models. By spring 2025 it was spun out as an independent company and later acquired X in an all-stock deal to combine data, models, compute and distribution. Its Grok chatbot has drawn scrutiny, particularly over AI-generated images. The European Commission and Ofcom have opened investigations into X over alleged misuse to create sexualised images. xAI said in January it tightened user restrictions.

Neuralink and The Boring Company now stand as the main Musk ventures still outside his larger corporate umbrellas. For Musk, the direction of travel is clear. His companies are not just collaborating. They are converging.

In Musk’s universe, rockets, robots and algorithms are no longer separate bets. They are pieces of the same grand gamble. And he is pushing all his chips to the centre of the table.