Elon Musk’s SpaceX acquires xAI, merging his two most ambitious companies

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SpaceX has acquired xAI, the company announced on Monday, merging two of Elon Musk’s most ambitious companies into the most valuable private company in the world.

“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission,” Musk said in a statement on SpaceX’s website.

The merger could be seen as an indication of the cash xAI needs to compete in the fast-growing field of AI, as well as the technology’s importance in future of space exploration.

SpaceX was valued at $800 billion as of a secondary share sale in December 2025, and xAI was valued at $230 billion as of their most recent funding round in January, according to PitchBook, a research firm that tracks the valuation of private companies.

The move also shows the scramble tech giants like Musk’s companies are going through to secure more computing resources to power artificial intelligence advancements.

“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling,” Musk wrote. “The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space.”

SpaceX sought permission on Friday from the Federal Communication Commission to launch a constellation of 1 million satellites into orbit. The filing said the aim is to provide a network of solar-powered data centers to “accommodate the explosive growth of data demands driven by AI.”

Musk said he estimates that the “lowest cost way to generate AI compute will be in space” within two to three years.

Musk is the latest tech leader to call for more computing power in the age of AI. Nvidia CEO Jensen Huang told CNBC last year that next-generation AI models will require “100…

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