NCS
By Chris Isidore, NCS
(NCS) — SpaceX has acquired xAI, the corporate introduced on Monday, merging two of Elon Musk’s most ambitious companies into the most worthwhile non-public firm on this planet.
“This marks not just the next chapter, but the next book in SpaceX and xAI’s mission,” Musk stated in a statement on SpaceX’s web site.
The merger might be seen as a sign of the money xAI must compete within the fast-growing area of AI, in addition to the expertise’s significance in way forward for area exploration.
SpaceX was valued at $800 billion as of a secondary share sale in December 2025, and xAI was valued at $230 billion as of their most current funding spherical in January, in response to PitchBook, a analysis agency that tracks the valuation of personal companies.
The transfer additionally reveals the scramble tech giants like Musk’s companies are going via to safe extra computing sources to energy synthetic intelligence developments.
“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling,” Musk wrote. “The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space.”
AI information facilities in area
SpaceX sought permission on Friday from the Federal Communication Commission to launch a constellation of 1 million satellites into orbit. The submitting stated the intention is to offer a community of solar-powered information facilities to “accommodate the explosive growth of data demands driven by AI.”
Musk stated he estimates that the “lowest cost way to generate AI compute will be in space” inside two to a few years.
Musk is the most recent tech chief to name for extra computing energy within the age of AI. Nvidia CEO Jensen Huang told CNBC final 12 months that next-generation AI fashions would require “100 times” extra energy than older fashions. AI is predicted to spike information heart energy demand by 165% by 2030, in response to Goldman Sachs.
And tech giants have been pouring billions into AI-related infrastructure to satisfy that demand. Microsoft final week reported it spent $37.5 billion within the final quarter of 2025 on capital expenditures like information facilities, whereas Meta spent $22.14 billion.
At the identical time, some US residents have reported seeing their electrical energy payments surge. A Bloomberg News analysis final 12 months discovered that in areas close to information facilities, electrical energy prices rose as a lot as 267% in comparison with 5 years in the past.
But greater electrical payments isn’t the one concern concerning the expertise.
Musk’s xAI additionally owns his social media platform X, whose chatbot Grok not too long ago got here underneath fireplace for producing sexual images of primarily ladies, lots of them actual individuals. The AI chatbot was additionally criticized final 12 months for a collection of violent and antisemitic posts, which the corporate apologized for and blamed on a programs replace.
Investors are lining as much as pour money into AI anyway. In January, xAI announced it raised $20 billion {dollars} from buyers, together with from Fidelity Management & Research Company and the Qatar Investment Authority.
Crossover at Musk’s companies
There was already loads of crossover between xAI and SpaceX nicely earlier than the acquisition. Several workers labored at each companies, reminiscent of Christopher Stanley, a principal safety engineer for SpaceX since 2018 who has been X’s senior director of safety engineering since 2022.
But some individuals who have labored at xAI have publicly expressed concern that the two companies are arrange for a tradition conflict.
“xAI prides itself on ‘move fast and break things,’ flat hierarchy, act first ask questions later. (It isn’t fully this, but tries to be) I have a hunch many xAI people will hit culture shock w/ SpaceX,” wrote Benjamin De Kraker, a former staffer on xAI’s human information group.
Musk confirmed in December he was planning an initial public offering for SpaceX, which was based in 2002. That Wall Street debut, reportedly valued at about $1.5 trillion, might be one of many largest in historical past. And that was earlier than the merger with xAI.
Both SpaceX and xAI have had no bother elevating cash from buyers desirous to take part of their progress plans. But being publicly traded would improve the power of the companies to lift capital.
That proposition that would add to Musk’s already staggering web value. He’s value $676 billion, in response to Bloomberg’s actual time Billionaire tracker, making him the richest individual on this planet. A mixed SpaceX and xAI public might dramatically improve that web value.
This story has been up to date with further context.
–NCS’s Clare Duffy, Lisa Eadicicco, Hadas Gold, Jackie Wattles and Matt Egan contributed to this report
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