Musk Creates a $1 Trillion AI–Space Colossus: SpaceX Buys xAI in the Biggest Deal in Corporate History

Elon Musk has done it again—this time on a scale the corporate world has never seen.

On Monday, Musk confirmed that SpaceX has acquired his artificial-intelligence startup xAI in a record-shattering deal that fuses rockets, satellites, data centers, and AI into a single powerhouse. The transaction, first reported by Reuters, sets a new all-time global M&A record, eclipsing Vodafone’s $203 billion takeover of Mannesmann in 2000—a title that stood unchallenged for more than 25 years.

According to people familiar with the matter, the deal values SpaceX at $1 trillion and xAI at $250 billion, instantly creating one of the most formidable technology platforms ever assembled.

“This marks not just the next chapter, but the next book,” Musk said, adding that the combined mission is about “scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars.”

Under the terms of the acquisition, xAI investors will receive 0.1433 shares of SpaceX for every xAI share they own. Some xAI executives may opt to cash out instead, at $75.46 per share, according to sources.

Shares of the combined company are expected to price at roughly $527 each, one person familiar with the transaction said.

The numbers alone are staggering:

SpaceX was already the world’s most valuable privately held firm, last pegged at $800 billion during an insider share sale. xAI, the maker of the Grok chatbot, was valued at $230 billion as recently as November, according to the Wall Street Journal.

Now, they are one.

This isn’t just a financial merger—it’s a strategic convergence.

xAI’s biggest costs are chips, data centers, and energy. SpaceX controls Starlink, the world’s largest satellite internet constellation, already a massive cash-flow engine. Together, they form a vertically integrated AI infrastructure stack spanning orbit, earth, compute, and data.

“Starlink was already a cash flow engine,” said Ali Javaheri, Senior Emerging Spaces Analyst at PitchBook. “Now it adds an AI revenue layer on top while also becoming a distribution surface for AI services and data.”

With potential policy changes allowing certain customer data to be used for AI training—and the emerging concept of orbital data centers—SpaceX is positioning itself as far more than a launch company. It’s becoming an AI-native infrastructure platform capable of serving both commercial clients and governments.

That narrative could not come at a more strategic moment.

The merger lands as SpaceX prepares for a blockbuster public offering later this year, which could value the company at over $1.5 trillion, according to people familiar with the plans.

By absorbing xAI now, SpaceX enters the public-market conversation not just as a space and defense contractor, but as a direct AI competitor to Alphabet’s Google, Meta, Amazon-backed Anthropic, and OpenAI.

It’s also a bold escalation in Musk’s long-running AI rivalry with OpenAI—one he co-founded, then famously broke from.

The deal further consolidates Musk’s sprawling business empire into what investors increasingly refer to as the “Muskonomy.”

That ecosystem now includes:

This is not diversification—it’s reinforcement. Each company feeds data, capital, talent, or distribution into the others.

Musk has followed this playbook before. In 2016, Tesla acquired SolarCity. Last year, he folded social platform X into xAI, giving the AI startup direct access to real-time human data and global distribution.

This deal takes that strategy to its extreme.

The sheer size and complexity of the transaction almost guarantees scrutiny.

SpaceX holds billions of dollars in U.S. government contracts with NASA, the Department of Defense, and intelligence agencies—each with authority to review mergers for national security risks.

Regulators and investors may also question:

Given SpaceX’s role in national defense and intelligence, any perceived blending of AI, data, and satellite infrastructure will be closely examined.

This isn’t just the biggest deal in history—it’s arguably the birth of a new kind of company.

By merging AI, space infrastructure, data distribution, and government-grade capabilities under one roof, Musk has created something that doesn’t fit traditional industry labels.

It’s not just a tech company.
It’s not just a defense contractor.
It’s not just an AI lab.

It’s an ecosystem—one designed to operate on Earth and beyond it.

And with a potential IPO looming, the world may soon have to decide how to price a company that aims not just to dominate markets—but to reshape the future of intelligence itself.