SpaceX Acquires xAI in $1.25 Trillion Deal Ahead of Landmark June IPO
SpaceX acquires xAI in a $1.25 trillion merger to move AI compute to orbit, setting the stage for a record-breaking June 2026 IPO.
Elon Musk
In a move that consolidates the "Muskonomy" into a singular, vertically integrated powerhouse, SpaceX has officially acquired xAI in an all-stock transaction valuing the combined entity at a historic $1.25 trillion. Announced via internal memo on February 2, 2026, the deal values SpaceX at $1 trillion and xAI at $250 billion. The acquisition is the final piece of a strategic puzzle: uniting the world’s most advanced launch infrastructure with the specialized intelligence required to manage it.
The merger is designed to solve a looming crisis for the AI industry: the exhaustion of Earth’s power grids. By folding xAI’s "Grok" models into SpaceX, the company can now accelerate its plans for a one million satellite orbital data center network. This shift to orbit isn't just a technical flex; it's a financial necessity. Internal projections suggest that space-based AI compute could result in a 95% reduction in long-term operating costs by utilizing unfiltered solar energy and the natural vacuum of space for cooling, bypassing the hundreds of millions of dollars in electricity bills faced by terrestrial facilities.
"To reach the next scale of intelligence, we have to go where the energy is limitless and the cooling is free," Musk wrote in the official merger announcement. "Folding xAI into SpaceX allows for a closed-loop system where we build the brain, the body, and the network simultaneously."
The financial endgame is a massive Initial Public Offering (IPO) scheduled for late June 2026. Sources familiar with the matter indicate that SpaceX CFO Bret Johnsen is targeting June 28 for the listing, a date that coincides with Musk’s 55th birthday. Wall Street analysts expect the combined entity to seek a public valuation of up to $1.5 trillion, which would make it the largest IPO in history, surpassing Saudi Aramco’s 2019 record.
By integrating xAI, SpaceX effectively removes the "middleman" of terrestrial cloud providers. SpaceX rockets will launch the hardware, xAI will provide the software, and Starlink will handle the data distribution. For investors, the value proposition is clear: SpaceX is no longer just a transportation company; it is the first end-to-end infrastructure provider for the next generation of artificial intelligence.
