SpaceX Considers Merger With xAI Ahead of IPO

SpaceX is reportedly in discussions to merge with xAI, another company owned by Elon Musk. The talks come ahead of SpaceX’s expected initial public offering later this year.

So far, no formal agreement has been reached between the two companies. Sources say discussions are still at an early stage.

Combined Valuation Could Exceed $1 Trillion

SpaceX is currently valued at approximately $800 billion, while xAI holds an estimated valuation of $230 billion.

If the merger proceeds, the combined entity would be worth more than $1 trillion. This would place it among the most valuable technology companies in the world.

Vision for Space-Based Data Center

Elon Musk’s main objective is to develop space-based data centers powered by solar energy. The project aims to be completed within the next three years.

Musk believes this approach could help address global energy shortages. He also argues that storing and processing data in space would significantly reduce operational costs.

Grok AI Models Expected to Benefit

According to Musk, the merger would strengthen the performance of Grok, xAI’s artificial intelligence models.

With access to advanced infrastructure and space-based computing resources, Grok models could operate faster and more efficiently.

Strategic Military Collaboration in Focus

Reports also suggest that the merger could help Musk establish deeper cooperation with the United States Department of Defense.

Recently, US Defense Secretary Pete Hegseth visited SpaceX facilities in Texas. The meeting focused on the potential use of Grok AI in military operations.

Existing Defense Contract With xAI

xAI already holds a contract worth $200 million with the US Department of Defense. The agreement allows the Pentagon to use xAI’s services in various applications.

This existing partnership strengthens the strategic value of a possible SpaceX–xAI merger.

A High-Stakes Move in AI and Space Technology

If completed, the merger would mark a major shift in the intersection of artificial intelligence, space technology, and defense innovation.

The move would also reinforce Elon Musk’s long-term ambition to integrate AI, energy, and space infrastructure on a global scale.