SpaceX Acquires xAI in $1.25 Trillion All-Stock Deal
7 192Elon Musk's SpaceX has acquired his AI startup xAI in an all-stock deal that values the combined entity at $1.25 trillion, ahead of what would be the largest initial public offering in history. SpaceX pegged its own valuation at $1 trillion -- a markup from the $800 billion it commanded in a December secondary stock sale -- and priced xAI at $250 billion based on a recent $20 billion funding round that valued the two-year-old AI company at $230 billion.
SpaceX CFO Bret Johnsen told investors on a call Monday that shares in the combined company would be priced at $527 and that xAI shares would convert into SpaceX stock at a roughly seven-to-one exchange rate. The company is still targeting a June IPO expected to raise as much as $50 billion, surpassing Saudi Aramco's $29 billion listing in 2019.
Musk said the least expensive way to do AI computation within two to three years will be in space. "Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment," he wrote. SpaceX filed last Friday for permission to launch up to a million satellites into Earth's orbit. xAI merged with Musk's social media platform X last March in a $113 billion deal, and Tesla announced a $2 billion investment in xAI last week.
7 comments
Ketamine (Score: 5, Insightful)
by lucifuge31337 ( 529072 ) on <daryl@intros[ ]t.net ['pec' in gap]> on Monday February 02, 2026 @10:53PM (#65965674)
When will the SEC step in? Oh right, never he bought them off.
I get the value of SpaceX, but... (Score: 5, Insightful)
by TheMiddleRoad ( 1153113 ) on Monday February 02, 2026 @10:53PM (#65965676)
xai? Isn't that the stuff mostly used to make images of famous people naked? 250 billion for that? Seems just a way to payoff Musk.
And a million satellites in space is not ruining our night sky?
Can somebody please...
Re:I get the value of SpaceX, but... (Score: 5, Funny)
by quenda ( 644621 ) on Monday February 02, 2026 @11:12PM (#65965698)
xai? Isn't that the stuff mostly used to make
What a whining hater. XAI owns Twitter. Thats at least $44B.
XAI is losing $6B/yr, multiply that by industry standard P/E of -40, and you get close to a $250B valuation.
Re:I get the value of SpaceX, but... (Score: 5, Informative)
by bruceki ( 5147215 ) on Tuesday February 03, 2026 @03:47AM (#65965974)
Look up kessler syndrome and then think about a million more in orbit. We may be locking ourselves out of space. https://en.wikipedia.org/wiki/... [wikipedia.org].
Re:Must be nice ... (Score: 5, Informative)
by Aristos Mazer ( 181252 ) on Monday February 02, 2026 @11:49PM (#65965754)
The valuation of SpaceX is based on the external purchasers that have put forth bids over the years, the most recent one settling in January of this year. The valuation of xAI is based on the latest funding round raised from venture capitalists outside of Musk. So there are more people than Musk who believe this valuation -- believe it enough to put multiple billions of their own dollars on the line for it. Whether that is the true valuation or not, well, that's always the game of stocks, right? If enough people believe a price, that's the price.
Re:Must be nice ... (Score: 5, Insightful)
by procrastinatos ( 1004262 ) on Tuesday February 03, 2026 @12:40AM (#65965808)
If you call your Qatari friends, and ask them to invest in xAI at a given valuation, with the promise that
- you'll back that valuation by having both Tesla and SpaceX acquire shares in xAI at the same price a week later;
- you'll have SpaceX fully acquire xAI another two weeks later at a 10% markup;
- you'll take the entire shebang public at again a 25-50% markup in half a year or so.
Do you think that your Qatari friends are actually investing in your fledgling AI startup? Or in something else entirely?
It's all a circlejerk, and in the case of the Muskonomy, more oftent than not, just outright masturbation.
hot in here (Score: 5, Informative)
by Tom ( 822 ) on Tuesday February 03, 2026 @02:38AM (#65965904)
Musk said the least expensive way to do AI computation within two to three years will be in space.
Has someone told him about the heat problem in space? Vacuum is cold, but it's also a near perfect insulation. Getting rid of heat is a constant problem for space craft because there is no heat exchange and radiating it off is the only option you have and it's terribly inefficient. And last I checked, GPUs generate quite a bit of heat.