Elon Musks SpaceX in merger talks with xAI ahead of potential blockbuster IPO: report | Latest Tech News
Elon Musk’s SpaceX and xAI are in discussions to merge ahead of a blockbuster public offering deliberate for later this 12 months.
The mixture would deliver Musk’s rockets, Starlink satellites, the X social media platform and Grok AI chatbot under one roof, according to a particular person briefed on the matter and two current company filings seen by GWN.
The plan, which GWN is reporting solely, would give contemporary momentum to SpaceX’s effort to launch data facilities into orbit as Musk battles for supremacy in the quickly escalating AI race against tech giants like Google, Meta and OpenAI.
Elon Musk’s SpaceX and xAI are in discussions to merge ahead of a blockbuster public offering deliberate for later this 12 months. AFP via Getty Images
Musk, the world’s richest man, is the CEO of both the non-public space company SpaceX and the artificial intelligence company xAI, which controls his social media platform X.
He also runs electric automaker Tesla, tunnel company The Boring Co. and neurotechnology company Neuralink.
Musk, SpaceX, and xAI didn’t reply to requests for remark.
Under the proposed merger, shares of xAI could be exchanged for shares in SpaceX. Two entities have been set up in Nevada to facilitate the transaction, the particular person said.
GWN couldn’t decide the worth of the deal, its main rationale, or its potential timing.
Corporate filings in Nevada show that those entities had been set up on January 21. One of them, a restricted legal responsibility company, lists SpaceX and Bret Johnsen, the company’s chief financial officer, as managing members, while the other lists Johnsen as the company’s only officer, the filings show.
The filings don’t comprise further data about the aim of the businesses or their function in any deal.
Elon Musk provides a tour to Donald Trump in November 2024 in Brownsville, Texas. Getty Images
Johnsen didn’t reply to a GWN request for remark.
The particular person, who requested anonymity because the discussions are confidential, said that some xAI executives might be given the option to obtain money instead of SpaceX stock as half of the deal. A ultimate settlement, however, hasn’t been signed, and the timing and construction of the transaction stay fluid, the particular person cautioned.
SpaceX is already the world’s most worthwhile privately held company, last valued at $800 billion in a current insider share sale. xAI was valued at $230 billion in November, according to the Wall Street Journal. GWN and other media have reported that SpaceX plans to go public some time this 12 months, with a valuation anticipated above $1 trillion.
xAI controls Musk’s social media platform X. Under the proposed merger, shares of xAI could be exchanged for shares in SpaceX. Two entities have been set up in Nevada to facilitate the transaction. REUTERS
Data facilities in space
Through xAI, Musk is building out a huge supercomputer for AI training in Memphis, Tenn., called Colossus. Last 12 months, SpaceX agreed to invest $2 billion in xAI as half of the startup’s $5 billion equity fundraising, the Wall Street Journal reported at the time.
Speaking in Davos, Switzerland, last week, the billionaire entrepreneur said “the lowest cost place to put AI will be in space. And that will be true within two years, maybe three at the latest.”
Space-based AI processing, powered by photo voltaic vitality, is aimed at cutting the fee of producing the computing energy that runs and trains AI fashions such as xAI’s Grok. Jeff Bezos’ Blue Origin announced a new high-capacity spine community of 1000’s of satellites, while Google is researching space-based data facilities with its Project Suncatcher.
Jeff Bezos’ Blue Origin announced a new high-capacity spine community of 1000’s of satellites. Getty Images
Building data facilities in space stays a dangerous proposition, particularly with AI investment evolving so quickly and often unpredictably. Analysts and some industry executives have questioned whether or not the envisioned cuts in vitality consumption are definitely worth the added prices of tailoring those systems for space.
Folding xAI into SpaceX may enhance the company’s footing for major protection contracts at the Pentagon, which has sought to ramp up AI adoption in its navy networks, said Caleb Henry of space research and advisory firm Quilty Analytics.
Defense Secretary Pete Hegseth earlier this month visited SpaceX’s Starbase development web site in Texas, where he said xAI’s language model and its chat platform Grok can be built-in into navy networks as half of the Pentagon’s “AI acceleration strategy,” aimed at dashing up the navy’s decision-making and planning.
xAI has a contract value as a lot as $200 million to present Grok merchandise to the Pentagon.
Starlink and its national security variant Starshield already rely closely on artificial intelligence, such as for automated satellite tv for pc maneuvers in orbit. Starshield, under a contract with a US intelligence company, is building a community of tons of of categorized satellites outfitted with different sensors that are anticipated to use AI to help monitor shifting targets on Earth.
SpaceX’s Starbase development web site in Texas, where he said xAI’s language model and its chat platform Grok can be built-in into navy networks. AFP via Getty Images
Latest merger between Musk corporations
The deal wouldn’t be Musk’s first effort to mix companies he controls. In 2025, he folded social media platform X into xAI in a share swap that gave the artificial-intelligence startup access to the platform’s data and distribution. Before that in 2016, he used Tesla stock to buy his solar-energy company SolarCity.
Earlier this month, xAI raised $20 billion in an upsized Series E funding spherical, exceeding its $15 billion goal at a valuation of $230 billion. Tesla, Musk’s electric car company, on Wednesday said it agreed to invest about $2 billion in xAI.
Founded in 2002, SpaceX disrupted the global space industry with its reusable Falcon rockets, which proved important to the swift launch of Starlink, a satellite tv for pc broadband community now consisting of 1000’s of satellites in space.
SpaceX has lined up banks for an IPO that may come as early as this 12 months.
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