SpaceX Acquires xAI in $1.25 Trillion Deal Ahead of IPO

SpaceX has acquired xAI—the parent of social media platform X and Grok AI—in a $1.25 trillion transaction, consolidating Elon Musk’s key assets ahead of SpaceX’s anticipated 2026 IPO. Musk cited space-based data centers as essential to scaling AI sustainably, arguing terrestrial infrastructure cannot meet future energy demands. The deal enables Musk and early investors, including Oracle’s Larry Ellison, to partially exit their $44 billion 2022 acquisition of Twitter. xAI reported a $1.46 billion net loss in Q4 2025 and burned $7.8 billion in the first nine months of the year. Regulators in the UK and EU are investigating Grok over non-consensual image generation. Analysts warn the merger may dilute SpaceX’s appeal, as xAI lags in a cash-intensive AI market dominated by rivals like OpenAI.