SpaceX Acquires xAI in $1.25 Trillion Deal Ahead of Planned IPO

SpaceX has acquired xAI, the AI company founded by Elon Musk in 2023, in a $1.25 trillion all-stock transaction, merging the two private firms ahead of a planned 2026 IPO. The combined entity aims to integrate AI, space infrastructure, and communications, with Musk citing space-based data centers powered by solar energy as key to scaling AI compute. Musk, CEO of both companies and Tesla, outlined the vision in a February 2, 2026 blog post, emphasizing vertical integration across rockets, AI, and X (formerly Twitter), which xAI acquired in March 2025 for $33 billion. Tesla recently invested $2 billion in xAI and sold $430 million in Megapack systems to it, raising governance concerns. Shares of xAI were valued at $526.59, with SpaceX previously targeting an $800 billion IPO valuation.