Author: Echo Wang and Joey Roulette
Feb 2 (Reuters) – Elon Musk said on Monday that SpaceX has acquired his artificial intelligence startup xAI, merging the rocket and satellite company with the maker of the Grok chatbot in a move aimed at unifying Musk’s artificial intelligence and space ambitions.
“This marks not only the next chapter, but the next book in SpaceX and xAI’s mission: to make a sentient sun by extension to understand the universe and extend the light of consciousness to the stars!” Musk said.
The deal, first reported by Reuters on Thursday, is one of the most ambitious tie-ups to date in the tech sector, combining a space and defense contractor with a fast-growing artificial intelligence developer whose costs are driven largely by chips, data centers and energy. It could also bolster SpaceX’s data center ambitions as Musk competes in artificial intelligence with rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI.
Bloomberg reported earlier in the day that the combined company is expected to price at about $527 per share, valuing it at $1.25 trillion.
Under the merger agreement, xAI will become a wholly-owned subsidiary of SpaceX, a person familiar with the matter said on condition of anonymity.
The merger comes as the aerospace company plans a massive public offering this year that could value it at more than $1.5 trillion, two people familiar with the matter said.
SpaceX, xAI and Musk did not immediately respond to requests for comment.
The deal further integrates Musk’s vast business empire and wealth into a tighter, complementary ecosystem – what some investors and analysts informally call “Muskonomy” – that already includes Tesla, brain chip maker Neuralink and tunneling company The Boring Company.
The world’s richest man has a history of consolidating his businesses. Last year, Musk merged social media platform X into xAI in a share swap, giving the artificial intelligence startup access to the platform’s data and distribution. In 2016, he used Tesla stock to acquire his own solar company, SolarCity.
The agreement is likely to draw scrutiny from regulators and investors over governance, valuation and conflicts of interest, given Musk’s overlapping leadership roles at multiple companies and the potential flow of engineers, know-how and contracts between entities.
SpaceX also has billions of dollars worth of federal contracts with NASA, the Department of Defense and intelligence agencies, which all have the authority to review mergers and acquisitions for national security and other risks.
(Reporting by Echo Wang in New York, Joey Roulette in Washington and Juby Babu in Mexico City; Editing by Alan Barona, Dawn Kopecki and Matthew Lewis)
