According to Musk, published on the official SpaceX website, the merger of the two companies will create an "innovation machine" capable of developing artificial intelligence, engaging in rocket building, providing internet services, and managing social media.
The details of the deal remain unknown. However, BBC sources report that xAI was valued at $125 billion, while SpaceX is valued at $1 trillion, making it the most expensive private company in history.
In January of this year, Tesla, another company led by Musk, announced plans to invest $2 billion in xAI.
Musk emphasized at that time that xAI should act as the "conductor of the orchestra" for Tesla factories, where autonomous robots will be involved. He also mentioned plans to reduce production of older electric vehicle models, the Model S and X, in favor of retooling factories to produce humanoid robots, Optimus.
Rumors suggest that SpaceX plans to conduct an initial public offering (IPO). Pitchbook analyst Emily Zheng believes that the merger with xAI is part of the preparation for this IPO.
She noted that "the merger of these companies before the IPO provides SpaceX with the opportunity to demonstrate to investors the prospects for differentiation and capital-efficient growth."
In his merger announcement, Musk also stated that he sees space as a solution to the energy shortage problem for companies working with artificial intelligence.
"In the long term, space-based AI is the only way to scale," the businessman asserts.
He added that he plans to "focus in the near future" on launching satellites to support AI systems.
"Creating space data centers will open new opportunities for funding and supporting self-developing bases on the Moon, a new civilization on Mars, and ultimately for the colonization of the entire Universe," Musk expressed his thoughts.
He hopes that such data centers will be able to harness solar energy, which would minimize their operating costs.
To realize this idea, Musk plans to launch 1 million satellites into orbit using Starship rockets. According to him, these rockets will be able to perform launches every hour and carry up to 200 tons of payload.
However, at this point, Starship rockets are still in the testing phase, and regular commercial flights are still a long way off.
xAI was founded as part of the social network X (formerly known as Twitter) after Musk acquired the platform in 2022.
By spring 2025, xAI had already become an independent company valued by investors higher than X.
Later, the startup purchased this social network, with Musk noting that the merger would allow for the integration of "data, models, computations, distribution, and employees" into a single structure.
The main product of xAI is the chatbot Grok, which has recently come under criticism for creating sexualized images of real people.
The European Commission and the British regulator Ofcom have launched an investigation into the company.
In January, xAI announced the introduction of restrictions on creating images that may violate laws.
