Elon Musk is combining SpaceX and xAI as he overhauls his sprawling business empire.
Musk told workers in a Monday memo that SpaceX has acquired xAI, his AI company, a source familiar with the matter confirmed to Business Insider.
SpaceX, which Musk founded in 2002, is reportedly gearing up for an initial public offering this year that could value the Starship maker at $1.5 trillion.
xAI, which the world’s richest man founded in 2023 to challenge OpenAI and Google in the race to build superintelligent AI, recently raised $20 billion in a funding round that valued the controversial AI startup at $230 billion.
The mega-deal is the latest sign that Musk is consolidating his various companies, which also include Tesla, the tunneling startup The Boring Company, and brain implant firm Neuralink.
In March 2025, Musk announced that xAI had acquired X, the social media platform formerly known as Twitter he bought in 2022. Meanwhile, SpaceX and Tesla have each invested $2 billion in xAI in recent months.
Deal talks between SpaceX and xAI were first reported by Reuters in January.
Combining SpaceX and xAI comes as Musk increasingly shifts his companies toward his vision of an AI-powered future.
Musk has said that SpaceX will launch orbital AI data centers in the coming years that could efficiently harness power from the sun. Last Friday, SpaceX filed a request with the FCC to launch as many as one million satellites to serve as orbital data centers.
Combining xAI with SpaceX allows the AI startup, which has faced global backlash over sexual images generated by its chatbot Grok, to leverage this orbital network to build more powerful AI models.
It also gives xAI access to significant capital. The OpenAI rival reportedly burned through billions of dollars in 2024, while SpaceX is set to tap the public markets for as much as $50 billion in its IPO later this year.
SpaceX and xAI did not respond to a request for comment.
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