Elon Musk Is Rolling xAI Into SpaceX—Creating the World’s Most Valuable Private Company

Elon Musk’s rocket And satellite company SpaceX is acquiring his AI startup xAI, Centibillionaire announced on Monday. In a blog post, Musk said the acquisition was necessary because global power demand for AI cannot be met by “terrestrial solutions” and that Silicon Valley will soon need to build data centers in space to fulfill its AI ambitions.

“In the long term, space-based AI is clearly the only way to scale,” Musk wrote. “So the only logical solution is to transport these resource-intensive efforts to a place with enormous power and space. I mean, space is called ‘space’ for a reason.”

The deal, which pulls together Musk’s two largest private enterprises, values ​​the combined entity at $1.25 trillion, making it the world’s most valuable private company, according to a Bloomberg report.

Before the XAI acquisition was announced, SpaceX was preparing to go public later this year. According to Bloomberg, the space company is still planning an initial public offering.

In December, SpaceX told employees it would buy out insiders’ shares in a deal that would value the rocket company at $800 billion, according to The New York Times. Last month, xAI announced that it had raised $20 billion from investors, bringing the company’s valuation to approximately $230 billion.

This is not the first time Musk has tried to consolidate parts of his vast business empire, which is largely privately owned and includes XAI, SpaceX, brain interface company Neuralink and tunnel transportation firm The Boring Company.

Last year, xAI took over Musk’s social media platform, since then, xAI’s main product, Grok, has become more integrated into social media platforms. Grok is featured prominently in various X features, and Musk has claimed that the app’s content-recommendation algorithm is powered by XAI’s technology.

A decade ago, Musk used shares of his electric car company Tesla to buy SolarCity, a renewable energy company that was then run by cousin Lyndon Rhys.

The XAI acquisition demonstrates how Musk can use his extensive network of companies to help realize his often grandiose vision of the future. Elon Musk said in the blog post that SpaceX will immediately focus on launching satellites into space to power AI development on Earth, but eventually, the space-based data centers he envisions building could power civilizations on other planets, such as Mars.

“This marks not only the next chapter, but the next book in SpaceX and XAI’s mission: scaling up to build a sentient Sun to understand the universe and extend the light of consciousness to the stars,” Musk said in the blog post.