The news: SpaceX acquired xAI this week as part of Elon Musk’s push to unify his companies. The merged company’s portfolio spans rockets and space assets alongside the Grok AI chatbot and social media platform X. This is Musk’s second major merger of two of his companies, following xAI’s acquisition of X in March 2025.

The deal combines SpaceX’s current valuation of about $1 trillion with xAI’s, which is around $250 billion, to make it the world’s most valuable private company, per CNBC. That leapfrogs OpenAI and ByteDance, which are valued at approximately $500 billion and over $330 billion, respectively.

SpaceX is expected to pursue an IPO around June. Once completed, the combined company would likely land in the top 10 most valuable public companies.

What it means for xAI: The merger will boost xAI’s computing scale and strategic positioning as it creates a tech powerhouse that combines SpaceX’s rockets and Starlink network with xAI’s models, like Grok, under one roof.

The merged company could also support xAI with space-based AI infrastructure—like solar-powered orbital data centers—to lower the long-term compute costs of AI and address power and cooling limits imposed by Earth-bound operations.

Why it matters: The deal gives xAI unique infrastructure advantages and a financial lifeline.

This financial support could be especially valuable considering AI companies are burning through cash to expand data center capacity. SpaceX’s earnings and assets could help offset those costs and reduce xAI’s reliance on revenues from Grok and X subscriptions.

Implications for the industry: A SpaceX IPO would make xAI part of a vastly larger public company and accelerate the latter’s access to capital and audiences. It’s a step toward deeper integrations between the tech and space sectors, linking AI, telecoms, and aerospace infrastructure in new ways.

With access to satellites, social media, compute, rockets, and user data, the combined entity is likely to become a major player in the future of AI development and compute access.

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