SpaceX Acquires xAI in $1 Trillion-Valued Merger, Musk Says AI Compute Will Move to Space

SpaceX has acquired xAI, merging Elon Musk’s two private companies into what is now the world’s most valuable private firm, the companies announced on February 2, 2026. The deal combines SpaceX—valued at $800 billion as of December 2025—and xAI, valued at $230 billion in January 2026, according to PitchBook. Musk stated the merger aims to shift AI computing to space, citing terrestrial data centers’ unsustainable power demands. SpaceX recently filed with the FCC to launch 1 million satellites for solar-powered orbital data centers. Musk estimates space-based AI compute will become the lowest-cost option within two to three years. The combined entity could pursue a public listing, potentially valuing it near $1.5 trillion. Investors including Fidelity and Qatar Investment Authority backed xAI’s $20 billion January fundraising round.