Under the terms of the deal, investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI they hold. Some xAI executives may opt to receive cash instead of SpaceX stock, at $75.46 per xAI share
Elon Musk’s SpaceX has acquired his artificial intelligence startup xAI in a record-setting transaction that unites the billionaire’s space and AI ambitions under one roof, in what could become the largest merger and acquisition deal ever, Reuters reported on Tuesday.
Under the terms of the deal, investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI they hold, the report said. Some xAI executives may opt to receive cash instead of SpaceX stock, at $75.46 per xAI share, the report added.
The transaction values SpaceX at $1 trillion and xAI at $250 billion, the report said, adding that the combined entity is expected to price shares at about $527 each.
Musk confirmed the acquisition, describing it as a defining moment for both companies. “This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars,” he said.
The deal, first reported by Reuters last week, represents one of the most ambitious tie-ups in the technology sector to date, merging a dominant space-and-defense contractor with a fast-growing AI developer whose operations are heavily driven by high-performance chips, data centres and energy infrastructure.
If completed at the disclosed valuations, the acquisition would surpass Vodafone’s $203 billion takeover of Germany’s Mannesmann in 2000, long regarded as the largest M&A transaction on record, according to data compiled by LSEG.
AI meets space
The merger strengthens SpaceX’s push beyond rockets and satellites into data infrastructure and AI-enabled services. SpaceX, already the world’s most valuable privately held company at a recent valuation of $800 billion following an insider share sale, is preparing for a blockbuster initial public offering this year that could value it at over $1.5 trillion, the report said.
For xAI, best known for developing the Grok chatbot, the deal provides access to SpaceX’s vast satellite network, computing ambitions and capital base. Musk is racing to compete with AI heavyweights such as Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI. Integrating AI capabilities with SpaceX’s satellite constellation and data pipelines could create a vertically integrated ecosystem spanning connectivity, compute and intelligence.
The tie-up further consolidates what some investors call the “Muskonomy” — an interconnected web of Musk-led ventures including Tesla, Neuralink and The Boring Company. Musk has a track record of blending his enterprises. Last year, he folded social media platform X into xAI through a share swap, giving the AI startup access to user data and distribution. In 2016, Tesla acquired SolarCity in an all-stock transaction.
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