San Francisco — Elon Musk’s SpaceX has acquired his artificial intelligence start-up xAI, combining the two companies in a deal that creates what is now considered the world’s most valuable private company.
While the financial terms were not officially disclosed, people familiar with the matter said the transaction values xAI at approximately $125 billion and SpaceX at around $1 trillion.
SpaceX confirmed the acquisition by publishing an internal memo from Musk, describing the merger as a move to unify artificial intelligence, space technology, satellite internet, and media operations under a single organisation.
xAI was originally formed as a unit within X, formerly known as Twitter, following Musk’s acquisition of the social media platform in 2022. The company later became an independent entity in 2025 and attracted investor interest due to its access to large volumes of real-time data.
The company’s main product, the Grok chatbot, has faced regulatory scrutiny in Europe and the UK over concerns related to AI-generated images. xAI said earlier this year that it introduced restrictions on image-editing features.
The merger follows a series of recent moves by Musk to align his technology ventures more closely. Last month, Tesla announced a $2 billion investment in xAI, with Musk stating that the AI company would play a central role in future automation and robotics initiatives.
Industry analysts say the consolidation could also position SpaceX more strongly ahead of a potential public listing, as the combined entity brings together advanced AI capabilities, infrastructure, and long-term growth ambitions.
Source: BBC
