SpaceX Acquires xAI in $1.2T-Valued Merger, Eyes Space-Based AI Data Centers

SpaceX acquired xAI on February 2, 2026, combining two Elon Musk-led companies in a deal that creates the world’s most valuable private company, valued at over $1.2 trillion, according to Bloomberg. The merger aims to develop AI data centers in space, with Musk claiming space is “the only logical solution” for scaling resource-intensive AI compute. Musk projected that within two to three years, space will offer the lowest-cost AI computing infrastructure. The move precedes SpaceX’s anticipated IPO later in 2026. xAI, valued at over $200 billion, has faced scrutiny over its Grok AI model, including investigations by U.S. state attorneys general and the European Union following deepfake image controversies. Tesla has also invested in xAI and integrates its technology. SpaceX operates more than 9,000 Starlink satellites and holds key NASA contracts.