Bloomberg reported on Monday that SpaceX, the space exploration company owned by Elon Musk, the CEO of Tesla, has merged with xAI, an artificial intelligence (AI) company also owned by Musk.
Musk confirmed the merger in a statement on SpaceX’s website, saying that SpaceX has completed the acquisition of xAI.
This move aligns with Musk’s earlier announcement that he would acquire xAI before proceeding with SpaceX’s initial public offering (IPO).
The statement elaborated that SpaceX acquired xAI to create the most ambitious vertically integrated innovation engine on Earth. This encompasses AI, rockets, space-based internet, mobile communication devices, and the world’s leading real-time information and free speech platform.
Musk emphasized that the primary motivation for merging the two companto establish data centers in space effectivelyn space. The merger is expected to yield significant synergies, such as using SpaceX’s spacecraft to transport xAI’s data center equipment.
He explained that the current pace of AI advancement demands enormous power consumption. Earth’s resources cannot meet global AI power demand, necessitating the placement of AI data centers in space.
Space-based data centers offer substantial advantages in power utilization. They can harness solar energy more efficiently without interference from clouds, storms, or nighttime darkness. Moreover, the vacuum environment eliminates the need for cooling systems.
Notably, space operations avoid the NIMBY (Not In My Back Yard) concerns that often plague terrestrial projects.
Bloomberg estimates that this merger values SpaceX at 1 trillion USD and xAI at 250 billion USD, creating a colossal entity worth 1.25 trillion USD.
While the exact date for SpaceX’s IPO remains unconfirmed, Bloomberg suggests it’s likely to occur between June and July 2026.