SpaceX acquires xAI in $1.25 trillion all-stock deal — largest merger in history

Elon Musk's SpaceX acquired xAI in an all-stock transaction valuing the combined entity at $1.25 trillion — SpaceX at $1 trillion, xAI at $250 billion. Each xAI share converts to 0.1433 shares of SpaceX stock. The deal was announced February 2 via a memo posted to SpaceX's website. xAI continues operating as a subsidiary; the two businesses remain operationally separate due to regulatory requirements. xAI is currently burning approximately $1 billion per month.

The stated rationale is orbital data centers — Musk argues AI's power and cooling demands are unsustainable on Earth long-term, and SpaceX's Starlink infrastructure is the vehicle for space-based compute. Whether or not that thesis holds, the merger consolidates Musk's AI, social (X), rocket, and satellite assets under a single cap table — a structural move that simplifies the path to a SpaceX IPO, which is targeting as early as June at a $1.5 trillion valuation.