Elon Musk’s SpaceX acquires xAI in record-setting deal ahead of mega IPO

Rocket startup SpaceX has acquired artificial intelligence startup xAI in a record-breaking deal, billionaire Elon Musk said Monday.

According to sources, the agreement was announced in a note Bloomberg. according to Associated PressSpaceX announced Monday that it is acquiring xAI in a bid to help the world’s richest man dominate the rocket and artificial intelligence businesses.

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The deal will combine several of its offerings, including artificial intelligence chatbot Grok, satellite communications company Starlink and social media company X.

This development comes as SpaceX is planning an initial public offering (IPO) that could raise up to $50 billion, valuing the company at around $1.5 trillion. Bloomberg News reported. He also discussed a possible merger with Tesla.

The agreement first Reuters Last week, Musk competed in the AI sector with rivals such as Alphabet’s Google, Meta, Amazon-backed Anthropic and OpenAI, while it could support SpaceX’s data center ambitions.

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The transaction values SpaceX at $1 trillion and xAI at $250 billion, according to a person familiar with the matter.

“This not only marks the next chapter, but the next book in SpaceX and xAI’s mission: Scaling up to create a sentient sun that will understand the universe and extend the light of consciousness to the stars!” Musk said:

new record

According to data compiled by LSEG, the acquisition of xAI sets a new record as the world’s largest M&A deal; it was a privilege that lasted more than 25 years, with Vodafone acquiring Germany’s Mannesmann in a hostile takeover valued at $203 billion in 2000.

The combined company consisting of SpaceX and xAI is expected to be priced at about $527 per share, another person familiar with the matter said.

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SpaceX was already the world’s most valuable private company, valued at $800 billion in the latest insider share sale. XAI was last valued at $230 billion in November. Wall StreetJournal.

The merger comes as the space company plans a blockbuster IPO this year that would be valued at more than $1.5 trillion, two people familiar with the matter said. Reuters.

SpaceX, xAI and Musk did not immediately respond to requests for comment.

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The deal further consolidates Musk’s vast business empire and wealth into a tighter, mutually reinforcing ecosystem — some investors and analysts informally refer to it as “Muskonomi” — that already includes Tesla, brain chip maker Neuralink and tunneling company Boring Company.

The world’s richest man has a history of consolidating his ventures. Musk brought X into xAI through a share swap last year, giving the artificial intelligence startup access to the platform’s data and distribution. In 2016, he purchased solar energy company SolarCity using Tesla shares.

Given Musk’s overlapping leadership roles at multiple firms, as well as the potential movement of engineers, proprietary technology and contracts between the entities, the deal could draw scrutiny from regulators and investors over governance, valuation and conflicts of interest.

SpaceX also has multibillion-dollar federal contracts with NASA, the Department of Defense and intelligence agencies, which have authority to review mergers and acquisitions for national security and other risks.

(With input from institutions)