- Updated: February 2, 2026
- 5 min read
Elon Musk’s SpaceX to Acquire xAI in $1.25 Trillion Deal, Aiming to Power AI in Space
Skip to main contentSecurityPoliticsThe Big StoryBusinessScienceCultureReviewsChevronMoreExpandNewslettersPodcastsVideoMerchSearchSearchSign InSign InSave StorySave this storySave StorySave this storyElon Musk’s rocket and satellite company SpaceX is acquiring his AI startup xAI, the centibillionaire announced on Monday.In a blog post, Musk said the acquisition was warranted because global electricity demand for AI cannot be met with “terrestrial solutions,” and Silicon Valley will soon need to build data centers in space to power its AI ambitions.“In the long term, space-based AI is obviously the only way to scale,” Musk wrote. “The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called ‘space’ for a reason.”The deal, which pulls together two of Musk’s largest private ventures, values the combined entity at $1.25 trillion, making it the most valuable private company in the world, according to a report from Bloomberg.SpaceX was in the process of preparing to go public later this year before the xAI acquisition was announced. The space firm’s plans for an initial public offering are still on, according to Bloomberg.In December, SpaceX told employees that it would buy insider shares in a deal that would value the rocket company at $800 billion, according to The New York Times. Last month, xAI announced that it had raised $20 billion from investors, bringing the company’s valuation to roughly $230 billion.This isn’t the first time Musk has sought to consolidate parts of his vast business empire, which is largely privately owned and includes xAI, SpaceX, the brain interface company Neuralink, and the tunnel transportation firm the Boring Company.Last year, xAI acquired Musk’s social media platform, X, formerly known as Twitter, in a deal that valued the combined entity at more than $110 billion. Since then, xAI’s core product, Grok, has become further integrated into the social media platform.Grok is featured prominently in various X features, and Musk has claimed the app’s content-recommendation algorithm is powered by xAI’s technology.A decade ago, Musk also used shares of his electric car company Tesla to purchase SolarCity, a renewable energy firm that was run at the time by cousin Lyndon Rive.The xAI acquisition demonstrates how Musk can use his expansive network of companies to help power his own often grandiose visions of the future.Elon Musk said in the blog post that SpaceX will immediately focus on launching satellites into space to power AI development on Earth, but eventually, the space-based data centers he envisions building could power civilizations on other planets, such as Mars.“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars,” Musk said in the blog post.You Might Also LikeIn your inbox: Maxwell Zeff’s dispatch from the heart of AIThe best EVs coming in 2026Big Story: Your first humanoid coworker will be ChineseWhat to do if ICE invades your neighborhoodSpecial edition: You’re already living in the Chinese centuryMaxwell Zeff is a senior writer at WIRED covering the business of artificial intelligence. He was previously a senior reporter with TechCrunch, where he broke news on startups and leaders driving the AI boom.Before that, Zeff covered AI policy and content moderation for Gizmodo, and wrote some of Bloomberg’s . Read MoreSenior WriterTopicsxAIElon MuskSpaceXacquisitionsspaceTeslaX‘Physical AI’ Is Coming for Your CarWhat the latest tech-marketing buzzword has to say about the future of automotive.Why a Chinese Robot Vacuum Company Spun Off Not One but Two EV BrandsThe pivot doesn’t look out of place at CES, where Chinese electronics companies are increasingly applying their manufacturing prowess to new industries.Google Gemini Is Taking Control of Humanoid Robots on Auto Factory FloorsGoogle DeepMind and Boston Dynamics are teaming up to integrate Gemini into a humanoid robot called Atlas.OpenAI Invests in Sam Altman’s New Brain-Tech Startup Merge LabsMerge Labs has emerged from stealth with $252 million in funding from OpenAI and others. 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