Musk confirms SpaceX merger with xAI ahead of IPO

SpaceX (SPAX.PVT) will merge with xAI (XAAI.PVT) in a deal combining Elon Musk’s two largest private ventures, the space exploration company said in a statement.

“SpaceX acquired xAI to build the most ambitious, vertically integrated innovation engine on (and off) Earth with artificial intelligence, rockets, space-based internet, direct-to-mobile communications, and the world’s leading platform for real-time information and free speech.” Musk said in his statement: It was published on SpaceX’s website. “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!”

The merger was first reported by Bloomberg early Monday.

Musk said the biggest driving force behind the merger was data centers in space and space-based artificial intelligence.

“Current advances in AI are dependent on large terrestrial data centers that require enormous amounts of power and cooling. The global electricity demand for AI cannot be met by terrestrial solutions even in the near term… Space-based AI is frankly the only way to scale,” Musk said.

Engineers at Tesla will sometimes work on SpaceX projects and vice versa, including xAI. Last week, Tesla confirmed it had invested $2 billion in xAI preferred stock.

SpaceX, on the other hand, is planning an initial public offering that could raise up to $50 billion and value the company at about $1.5 trillion, according to Bloomberg News. It’s unclear how these numbers will change now that xAI is under the SpaceX umbrella.

This story is developing. Check back for updates.

Pras Subramanian is Yahoo Finance’s Chief Automobile Correspondent. you can follow it X and on instagram.

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