SpaceX and AI Firm xAI Discuss Merger Ahead of Major Public Offering

Elon Musk’s SpaceX and artificial intelligence company xAI are in talks about a possible merger ahead of a major public offering planned for later this year. Reuters reports that the move would bring together SpaceX’s rockets, Starlink satellites, the X social media platform, and the Grok AI chatbot under one company.

If the deal goes through, it could strengthen Musk’s position in the global artificial intelligence race. He is competing with major companies such as Google, Meta, and OpenAI.

ALSO READ: BNR suspends Mobicash over regulatory breaches

Under the plan, xAI shareholders would receive SpaceX shares in exchange for their holdings. Two companies were recently registered in Nevada to support the deal.

One of the entities lists SpaceX and its Chief Financial Officer, Bret Johnsen, as managers. The other names Johnsen as its only officer. The filings do not clearly explain their purpose.

Some xAI executives may receive cash instead of stock. However, both sides have not agreed on final terms.

Neither Elon Musk, SpaceX, nor xAI has commented on the reported talks. Bret Johnsen has also declined to comment.

A source familiar with the matter said talks are still ongoing. The timing and structure of the deal remain unclear.

Strong Valuations and Public Listing Plans

SpaceX is now the world’s most valuable private company. Its recent valuation stands at about $800 billion. The Wall Street Journal valued xAI at $230 billion in November.

Reports suggest that SpaceX plans to go public later this year. Its valuation could exceed $1 trillion.

Musk also leads several other companies. These include Tesla, Neuralink, and The Boring Company.

Last year, SpaceX invested $2 billion in xAI. This investment was part of a $5 billion fundraising round.

Expansion of AI Infrastructure and Space-Based Computing

The proposed merger would support SpaceX’s plan to build data centers in orbit. Musk believes space will soon offer the lowest-cost location for AI systems. He points to solar power and lower infrastructure costs.

This approach aims to reduce the cost of training and running AI models. It also supports tools such as xAI’s Grok chatbot.

Through xAI, Musk is building a large supercomputer in Memphis, Tennessee. The system, known as Colossus, supports AI training.

At the World Economic Forum in Davos, Musk said space-based AI could become viable within two to three years.

Other companies are also exploring this area. Jeff Bezos’ Blue Origin plans a satellite backbone network. Google is researching similar technology under Project Suncatcher.

These efforts show growing competition in space-based computing and artificial intelligence.