Musk’s SpaceX acquires xAI in a record $250 billion deal
Elon Musk said on Monday that SpaceX, which he founded and heads, has purchased his artificial intelligence startup xAI in a landmark transaction that brings together his interests in AI and space.
The deal is among the biggest in history, especially for a startup, as it values xAI at $250 billions and SpaceX at $1 trillion, giving the resulting entity a $1.25 trillion valuation as the biggest startup in the world by far.
The acquisition aims to strengthen SpaceX’s push into data center infrastructure as Musk competes in artificial intelligence with companies such as Google, Meta, Amazon-backed Anthropic, and OpenAI.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!” Musk said in the announcement.
With this purchase, xAI sets a new record for the largest merger and acquisition deal ever completed. That record had stood for a quarter of a century, since Vodafone’s hostile $203 billion takeover of Germany’s Mannesmann in 2000(based on LSEG data).
Even before the merger, SpaceX was already the most valuable privately held company in the world, most recently valued at $800 billion in an insider share sale. xAI was last valued at $230 billion in November, according to WSJ.
The merger comes as SpaceX prepares for a major public offering later this year that could value the company at $1.5 trillion and raise $50 billion in stock sales. If the IPO goes as planned, it would be the biggest on record, surpassing Aramco’s 2019 IPO that raised $29 billion.
The transaction further tightens the links across Musk’s wide-ranging business empire, consolidating them into a more integrated and mutually supportive network. That group already includes Tesla, brain-implant company Neuralink, and tunnel-building startup The Boring Company.
Musk has a track record of combining his ventures. Last year, he merged social media platform X, which he purchased earlier for $44 billion, into xAI through a share swap, giving the AI company access to X’s data and distribution. In 2016, he used Tesla stock to acquire his solar energy firm SolarCity.
The agreement is not final yet, as it may face scrutiny from regulators and investors regarding governance, valuation, and potential conflicts of interest, given Musk’s overlapping leadership roles and the possible transfer of engineers, proprietary technology, and contracts between the businesses.
