SpaceX Acquires xAI in Record $1.25 Trillion Deal
Narrative
SpaceX acquires xAI to form the most ambitious vertically-integrated innovation engine on (and off) Earth, combining AI (Grok models), rockets, Starlink space-based internet, and real-time information platform (X). Mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars. Plans include orbital data centers for low-cost AI compute.
Reality
Announced February 2, 2026 via @xai post ("One Team") linking to update; Elon Musk followed with "To the stars! @SpaceX & @xAI are now one company." Structured as SpaceX acquiring xAI (xAI becomes wholly-owned subsidiary). Combined valuation ~$1.25T (SpaceX ~$1T, xAI ~$250B). Immediate integration for shared compute/innovation; tax-free reorganization benefits noted. Widely covered as largest M&A ever; SpaceX IPO plans remain on track for later 2026.
Implication
Unifies Musk's AI and space empires under SpaceX, providing xAI stable funding/infrastructure amid massive compute needs. Enables long-term orbital data center ambitions for AI scaling. Creates most valuable private company; intensifies vertical integration in frontier tech. Raises questions on antitrust, investor dilution, and execution feasibility of space-based compute. Boosts momentum for SpaceX IPO and potential further consolidations (e.g., Tesla speculation).