SpaceX merges with xAI, fueling Elon Musk’s trillion-dollar empire narrative

2026 could become one of the biggest IPO years in history, with SpaceX, OpenAI, and Anthropic all widely expected to go public. Among them, SpaceX—controlled by Elon Musk—has drawn the most attention.

On February 2, reports said SpaceX completed an all-stock acquisition of its AI subsidiary xAI. The combined entity is valued at around $1.25 trillion, with SpaceX at roughly $1 trillion and xAI at $250 billion, positioning SpaceX as one of the world’s most valuable private companies ahead of a potential IPO.

The core vision behind the deal is space-based AI infrastructure. Musk plans to deploy AI data centers in orbit, using SpaceX’s launch capability and the Starlink satellite network to run Grok inference and partial training workloads in space, powered by solar energy and orbital cooling.

The merger creates a vertically integrated ecosystem spanning rockets, satellite internet, and advanced AI models, giving Musk a unique advantage over traditional AI companies. It also signals a shift in AI competition—from algorithms alone to control over compute, energy, and infrastructure.

In this new era, Musk is not just building AI software, but attempting to own the hardware foundation of the next digital economy—beyond Earth.