SpaceX has acquired xAI in a deal valued at about $1.25 trillion, according to Reuters. Because both companies are privately held, the valuation reflects negotiated deal math and investor expectations and could shift materially depending on financing, governance, and any path toward an eventual public offering.
The announcement frames the tie-up as an effort to unify SpaceX’s launch and satellite infrastructure with xAI’s model development, including ambitions for space-based computing. SpaceX and xAI founder and CEO Elon Musk noted that the power and cooling demands of terrestrial AI data centers will become increasingly difficult to meet at scale and is proposing orbit as a long-term solution through near-constant solar energy and additional physical capacity.
As described, one of the marquee ideas is “orbital data centers,” envisioned as a large satellite constellation that would serve as compute infrastructure in space. Reports characterized the concept as an effort to extend SpaceX’s satellite footprint beyond connectivity into AI infrastructure, potentially creating a new competitive front with major AI labs and hyperscalers.
The deal also lands amid heightened attention on SpaceX’s longer-term capital markets plans. Separate reporting in late January described SpaceX weighing a 2026 IPO and fundraising scenarios that could push the company’s valuation above the $1.25 trillion figure cited in the xAI transaction reporting, though SpaceX has not publicly confirmed IPO timing.
Neither SpaceX nor xAI has released detailed transaction terms through broadly accessible filings in the reporting reviewed, and key elements such as consideration, governance, treatment of minority investors, and regulatory review remain unclear.
KEY QUOTES:
“SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform. This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!”
“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.”
“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!”
Elon Musk, founder and CEO of both xAI and SpaceX
