SpaceX confirmed the takeover of xAI , the company behind the Grok chatbot, in a memo from Musk published on its website.
He described the merger as the creation of an 'innovation engine' bringing together AI, rockets, satellite internet and media under a single structure.
Financial terms were not disclosed, but a source familiar with the deal said xAI was valued at about $125bn, while SpaceX was pegged at $1tn, potentially making it the world's most valuable private company.
The move follows Tesla's $2bn investment in xAI announced last month. At the time, Musk told Tesla investors that xAI could act as an 'orchestra conductor' for the company's factories, particularly as it shifts toward autonomous robots. Tesla has since said it will stop producing two vehicle models to focus on robotics, a decision that faced resistance from some shareholders.
Industry analysts see the deal as a step toward a future stock market debut. Emily Zheng, a senior analyst at Pitchbook, said the consolidation 'has all the markings of a company preparing for a public listing,' citing the high costs of AI infrastructure and energy.
'Consolidating these companies ahead of an IPO [electric car company] allows SpaceX to present a differentiated, capital-efficient growth narrative,' she said.
In the memo, Musk argued that space offers the long-term solution to AI's energy demands.
'In the long term, space-based AI is obviously the only way to scale,' he wrote, pointing to AI satellites and space-based data centres as a near-term focus.
xAI, which emerged from X (formerly Twitter), has also faced scrutiny in Europe over Grok's image-generation features. The company said it has since imposed new restrictions on users.
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Source : https://en.igihe.com/science-technology/article/spacex-merges-with-xai-in-landmark-deal
