SpaceX, Elon Musk's space company, has officially announced the acquisition of xAI, an artificial intelligence company. This merger creates the most valuable private company in history, with an estimated value exceeding 1 trillion dollars (approximately 20.6 trillion Czech crowns). According to sources familiar with the transaction, xAI was valued at 125 billion dollars and SpaceX at 1 trillion dollars.
In a memorandum published on SpaceX's website, Musk said that the combination would create an "innovation engine" that would bring artificial intelligence, rockets, space-based internet connectivity, and media under one roof. The transaction represents another step in Musk's strategy to consolidate his business interests.
xAI and its AI models
xAI began as a division of the social network X (formerly Twitter), which Musk purchased in 2022. The company used access to real-time text data as training data for artificial intelligence. By the spring of 2025, xAI had been incorporated as a separate entity, and investors valued it more highly than the X network itself.
xAI's main product is the Grok chatbot, which has nevertheless come under fire several times over its AI image-generation feature. The European Commission and the British regulator Ofcom launched investigations into the X platform over concerns that Grok had been used to create sexualized images. In January, xAI said that it had introduced restrictions for Grok users that limit image editing.
Data centers in space
Musk explained in his memorandum that space will provide a solution to the energy needs faced by artificial intelligence companies. "In the long term, space-based AI is clearly the only way to scale," Musk wrote. Current advances in AI depend on large terrestrial data centers that require enormous amounts of energy and cooling. Global demand for electricity for AI simply cannot be met by terrestrial solutions, even in the near future, without causing hardship for communities and the environment.
SpaceX has asked the Federal Communications Commission for permission to launch a constellation of 1 million satellites into orbit. The application states that the goal is to provide a network of solar-powered data centers to "meet the explosive growth in data demands driven by AI". Musk estimates that "the cheapest way to generate AI computing power will be in space" within two to three years. By directly harnessing nearly constant solar energy with minimal operating or maintenance costs, these satellites will transform the ability to scale computing power.
Connections between Musk's companies
There was already significant overlap between xAI and SpaceX before the acquisition. Several employees worked at both companies, including Christopher Stanley, SpaceX's principal security engineer since 2018, who has also served as X's senior director of security engineering since 2022.
However, some people who worked at xAI have publicly expressed concerns that the two companies are headed for a culture clash. Benjamin De Kraker, a former member of xAI's human data team, wrote: "xAI prides itself on 'move fast and break things,' a flat hierarchy, act first and ask questions later. I have a feeling that many people from xAI will experience culture shock at SpaceX."
Preparing to go public
In December, Musk confirmed that he plans an initial public offering (IPO) for SpaceX, which was founded in 2002. This Wall Street debut, reportedly valued at approximately 1.5 trillion dollars (about 30.9 trillion Czech crowns), could be one of the largest in history. And that was before the merger with xAI.
Emily Zheng, a senior analyst at Pitchbook, said that the xAI deal has all the hallmarks of a company preparing to go public. "The enormous costs of computing power, infrastructure, and energy are why we are seeing many of the most valuable startups, such as SpaceX, preparing to go public," Zheng said.
A vision of a multiplanetary civilization
In the SpaceX memorandum announcing the merger with xAI, Musk wrote about his broader ambitions: "The capabilities we unlock by making space-based data centers a reality will fund and enable self-sustaining bases on the Moon, an entire civilization on Mars, and ultimately expansion into the universe." Neuralink and The Boring Company now appear to be the only two smaller Musk companies that have not been incorporated into one of his larger operations. xAI acquired the social media platform X in an all-stock transaction last March, with Musk saying that the merger would "combine data, models, computing power, distribution, and talent".
Source: bbc.com and edition.cnn.com
