The world's most valuable private company is born! Elon Musk's SpaceX and xAI merge, with a valuation surpassing one trillion dollars, and an IPO is expected.

Elon Musk’s SpaceX announces acquisition of xAI, merging two giants to become the world’s highest-valued private company. The plan is to combine Grok technology with hardware capabilities and deploy a million satellites to establish space data centers. Market expectations suggest this move is paving the way for an IPO.

Elon Musk’s SpaceX and xAI merge to create the world’s most valuable private company

SpaceX, Elon Musk’s space exploration company, officially announced the acquisition of AI startup xAI yesterday (2/3). Now, Musk’s two major ventures have merged, and the world’s highest-valued private enterprise has been born.

Although the specific terms of the acquisition have not been publicly disclosed, BBC citing sources familiar with the matter revealed that the deal values xAI at $125 billion, while SpaceX’s valuation reaches $1 trillion.

According to data from market research firm PitchBook, as reported by CNN, SpaceX’s valuation in the December 2025 secondary market stock sale has reached $800 billion; meanwhile, xAI’s latest funding round in January this year valued it at $230 billion.

SpaceX integrates xAI to create an innovative engine for space technology

In an internal memo to employees, Musk stated that after the merger, the two companies will develop an innovative engine integrating artificial intelligence, rocket launches, space internet, and media operations.

Currently, xAI’s main product is the AI chatbot “Grok,” but recent controversies over Grok AI’s image generation and editing features have drawn scrutiny from regulators in multiple countries and the public.

• Related report: Grok generated over 20,000 images of minors in 11 days! EU launches investigation, with a maximum fine of 6% of annual revenue

Despite this, by combining AI technology with SpaceX’s hardware resources, Musk hopes to further leverage the synergy between the two companies, applying software computing power to broader physical infrastructure.

Recently, xAI also secured $20 billion in funding, with investors including Fidelity, Qatar Investment Authority, and others. Tech giants Nvidia and Cisco also participated as “strategic investors.”

• Related report: Musk’s xAI raises $20 billion! Nvidia also invests, with X and Grok reaching 600 million active users per month

SpaceX deploys space AI data centers

To meet the massive computational demands brought by AI development, SpaceX has filed an application with the U.S. Federal Communications Commission (FCC) to send 1 million satellites into orbit.

The documents reveal that SpaceX plans to build a solar-powered space data center network to satisfy the explosive data needs driven by AI. Musk estimates that in the next two to three years, generating AI computing power in space will become the most cost-effective method.

Musk is attempting to break free from the limitations of traditional ground-based data centers by utilizing the space environment to address energy consumption and cooling bottlenecks, opening a new frontier for AI infrastructure.

Image source: SpaceX SpaceX has filed an application with the FCC to send 1 million satellites into orbit.

Analyst: The merger is a strategic move to pave the way for an IPO

With the merger announcement, rumors of SpaceX going public have intensified.

Senior PitchBook analyst Emily Zheng believes that the acquisition of xAI by SpaceX exhibits all the characteristics of a company preparing for an IPO.

Due to the extremely high costs of computing, infrastructure, and energy, this is also why high-valuation startups like SpaceX are preparing to enter the public market this year.

She further analyzed that, before going public, SpaceX’s integration of these companies can demonstrate to investors a differentiated and more capital-efficient growth blueprint. In other words, the merger not only strengthens its technological narrative but also adds more attractive leverage for the upcoming stock offering.

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