SpaceX in Talks to Merge with xAI Ahead of IPO, Sources Say

SpaceX and xAI are negotiating a merger ahead of SpaceX’s planned 2026 IPO, aiming to consolidate Musk’s AI, satellite, and social media assets under one entity, according to a source briefed on the matter. The deal would exchange xAI shares for SpaceX stock, facilitated by two Nevada entities established January 21. SpaceX CFO Bret Johnsen is listed in filings as managing member or sole officer. No final agreement is signed; terms remain fluid, though some xAI execs may receive cash. SpaceX, valued at $800B, plans an IPO targeting >$1T valuation; xAI was last valued at $230B. Musk aims to deploy AI data centers in orbit, citing lower long-term energy costs via solar power. The merger could strengthen bids for Pentagon AI contracts — xAI already holds a $200M deal to integrate Grok into U.S. military systems. Starshield satellites already use AI for target tracking.