The merger of the artificial intelligence company with the space company could reach a market valuation of $1.25 trillion. The billionaire speaks of a step to implement his futuristic plans.
Billionaire Elon Musk announced Monday the absorption of xAI, his artificial intelligence (AI) company which also owns the social network “SpaceX has acquired xAI to form the most ambitious vertically integrated innovation engine on Earth (and beyond), combining AI, rockets, space internet, direct-to-mobile communications and the world’s largest real-time information and free speech platform”writes the richest man in the world in a message published on the SpaceX website.
Elon Musk justifies this preliminary merger on Monday as a step to accomplish the “next chapter” from SpaceX: build giant photovoltaic power plants in orbit, more efficient than on Earth, combined with AI data centers. This futuristic project, which he describes as “conscious sun” («sentient sun»), is part of its ambition to establish “autonomous bases on the Moon” avant “an entire civilization on Mars and ultimately an expansion in the universe”he writes.
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Undisclosed schedule
“Global electricity demand for AI simply cannot be met with land-based solutions, even in the short term, without imposing hardship on communities and the environment”justifies the multi-billionaire, for whom “Spatial AI is obviously the only way to scale up in the long term”. “With launches every hour carrying 200 tons per flight, Starship will deliver millions of tons to orbit and beyond per year”assures the businessman. The announcement does not specify the financial terms of the acquisition, nor a deployment schedule.
The deal is one of the most ambitious tie-ups in the technology sector to date, combining a space and defense company with a fast-growing AI developer whose costs are largely tied to chips, data centers and energy. It could also bolster SpaceX’s ambitions in data centers, as Elon Musk competes with rivals such as Google (Alphabet), Meta, Amazon-backed Anthropic, and OpenAI in the AI space.
Valuation of $1,250 billion expected
The company resulting from the merger should set the price of its shares around 527 dollars per unit and would reach a valuation of 1.250 billion dollars, according to our colleagues at Bloomberg. According to a source familiar with the matter, who requested anonymity, xAI would become a wholly owned subsidiary of SpaceX as part of the merger agreement. This merger precedes the planned IPO this year of the rocket and satellite group, announced as the most massive in history. SpaceX is seeking to raise $50 billion for a valuation of around $1,500 billion, according to the Financial Times
The deal further consolidates Musk’s sprawling empire and interests into a more integrated and synergistic ecosystem – what some investors and analysts informally call the “Musconomically” – which already includes Tesla, brain implant maker Neuralink and tunneling company The Boring Company. The richest man in the world has a habit of merging his companies: xAI, which operates the conversational robot Grok and absorbed the social network
In 2016, he used Tesla stock to buy his solar energy company SolarCity. SpaceX also holds billions of dollars in federal contracts with NASA, the Department of Defense and intelligence agencies, all of which have some authority to review M&A deals for national security and other risks. “Launching a constellation of a million satellites functioning as orbital data centers is a first step towards becoming a Type II civilization on the Kardashev scale”in other words capable of capturing all the energy of the star in its system, adds Elon Musk, citing this concept from a Soviet astronomer.
