Elon Musk has announced the successful merger of his aerospace company, SpaceX, with his artificial intelligence startup, xAI. This unprecedented deal, valued at approximately $1.25 trillion, marks the largest corporate merger ever based on implied value, surpassing all previous transactions in both public and private sectors.
The acquisition aims to create a more integrated technology platform that combines advancements in artificial intelligence, space exploration, satellite internet, direct-to-device communications, and real-time computing infrastructure. In a statement released on Monday, SpaceX emphasized the potential of space-based data centers as a solution to the significant energy demands posed by AI services. Musk remarked, “Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term.”
According to Bloomberg, SpaceX is currently valued at $1 trillion, while xAI holds a valuation of $250 billion. This merger will result in a combined enterprise with a projected value of $1.25 trillion, with shares expected to be priced at $526.59 each. The merger coincides with SpaceX’s preparations for what is anticipated to be one of the largest initial public offerings (IPOs) on record later this year. Sources familiar with the matter indicated that the value of the combined company could exceed $1.5 trillion once it goes public.
Under the terms of the merger, which have not been publicly disclosed, xAI investors will receive SpaceX stock as part of the transaction. This move has the potential to reshape the landscape of both the aerospace and artificial intelligence industries, positioning the combined entity at the forefront of technological innovation.
Despite facing criticism regarding xAI’s Grok chatbot, which has been accused of promoting racist content and disseminating nonconsensual sexualized deepfake images, the company has still managed to attract significant investor interest. In January 2024, xAI announced it had raised $20 billion in a Series E funding round, led by prominent investors, showcasing the ongoing global enthusiasm for AI advancements.
As the merger unfolds, the implications for the tech industry and beyond will be closely monitored. Musk’s vision of leveraging space technology to address the energy needs of AI services could pave the way for a new era in both sectors. With the merger set to redefine the boundaries of technology, industry watchers are eager to see how this ambitious plan will materialize in the coming months.
