Elon Musk has folded his fast-growing technology company xAI into SpaceX, sealing what is now the largest merger ever recorded in the technology sector.
The transaction links a rocket and satellite heavyweight with a company built to develop advanced conversational systems, pushing SpaceX far beyond launch services and into the core infrastructure behind next-generation computing.
People familiar with the agreement say SpaceX is valued at $1 trillion, while xAI carries a price tag of $250 billion.
Together, that creates a private entity worth about $1.25 trillion, a figure that eclipses Vodafone’s takeover of Mannesmann in 2000, which stood unchallenged for more than two decades.
Under the terms of the deal, investors in xAI will receive 0.1433 shares of SpaceX for each xAI share they hold. Some senior executives at xAI are said to have the option of taking cash instead, priced at $75.46 per share.
The combined company is expected to price its shares at roughly $527.
Describing the acquisition, Musk said: “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!”
The merger gives SpaceX a direct route into high-demand computing infrastructure as power, cooling and chip supply become key limits to growth.
Musk has repeatedly argued that land-based data centres are nearing their limits, both economically and environmentally. Space, in his view, provides cheaper energy management and faster scaling within a few years.
SpaceX already tops the private space market and was last valued at about $800 billion during an internal share sale. xAI, which had been valued at $230 billion late last year, brings not just software expertise but also access to vast data streams and distribution channels created through earlier internal mergers.
This deal also tightens what investors often call the “Muskonomy”. Tesla, Neuralink, The Boring Company and the social platform X now sit alongside a unified space and computing operation. Musk has done this before.
Tesla’s purchase of SolarCity in 2016 and the earlier share swap that moved X under xAI’s control both followed the same pattern of consolidation.
Attention now turns to the public markets. People close to the matter say the combined business is preparing for a major stock market debut in 2026, with expectations that it could command a valuation above $1.5 trillion.
If that happens, it would rank among the most valuable listed companies in the world.
Regulators are unlikely to stay quiet. SpaceX holds billions of dollars in contracts with NASA, the US Department of Defence and intelligence agencies.
Any transfer of assets, staff or technology will attract scrutiny, particularly given Musk’s overlapping leadership roles across several firms.
Neither SpaceX nor xAI responded immediately to requests for comment.
