Elon Musk’s rocket company SpaceX has acquired his artificial intelligence company xAI, as the billionaire seeks to consolidate more of his technology businesses under one structure.
The deal would value SpaceX at about $1 trillion and xAI at $250 billion, according to people familiar with the deal.
SpaceX confirmed the deal on Monday, publishing a memo from Musk that said the merger was the creation of an “innovation engine” that would combine artificial intelligence, rockets, space-based internet and media platforms.
Financial terms were not disclosed. Musk said the integration would allow for deeper integration of AI development with SpaceX’s space infrastructure, arguing that the world’s growing demand for computing power cannot be met on Earth alone.
“In the long term, it is clear that space-based AI is the only way to scale,” Musk wrote, adding that launching AI-focused satellites will be an immediate priority.
The move follows a series of internal mergers and investments across Musk’s company. Last year, xAI was integrated with the company’s social media platform X, and electric car maker Tesla revealed a $2 billion investment in xAI. Musk previously told Tesla investors that he envisions xAI to serve as a central system to coordinate robotics and automation within Tesla’s factories.
Some Tesla shareholders have expressed concerns about the strategy, wondering if it is diverting resources away from the automaker’s core business.
Musk said in the memo that advances made by space-based data centers could eventually support self-sustaining bases on the moon, human habitation on Mars, and broader expansion into space.
SpaceX has also submitted plans to U.S. regulators to deploy a large number of satellites that could support orbital data centers.
The acquisition underscores Musk’s long-term ambition to tightly combine artificial intelligence, space technology and advanced manufacturing into a single ecosystem.
