SpaceX Acquires xAI in $1.25B Merger, Eyes $525 IPO Pricing

SpaceX announced the acquisition of xAI, the AI company behind the social media platform X, in a $1.25 billion merger creating a combined entity valued higher than the sum of their separate valuations. The deal is expected to price at roughly $525 per share if SpaceX goes public, likely this year. The merged company is pursuing a futuristic vision of deploying solar-powered AI “satellite data centers” in sun-synchronous orbit to perform computations and potentially reduce Earth-based data center costs within three years. However, technical challenges include radiation-hardening chips, efficient heat dissipation, and reliable low-orbit communication, with a 2040 timeline for a usable system being typical. SpaceX’s $17 billion in wireless spectrum purchases and a partnership with T-Mobile support but do not position it to replace terrestrial cellular networks.