Elon Musk mulls merging SpaceX with artificial intelligence firm xAI: report

• xAI was valued at $200 billion in a fall fundraising round, while SpaceX is seeking to raise $50 billion at a $1.5 trillion valuation
• Musk aims to launch AI data centers into space, requiring SpaceX's rocket technology and significant capital investment to handle growing AI data demands
• SpaceX recently asked the FCC for permission to deploy satellites into orbit to support AI infrastructure, citing cost and energy efficiency benefits over terrestrial data centers

Summary: Elon Musk Considers Merging SpaceX with xAI

Elon Musk is reportedly in advanced talks to merge SpaceX with his artificial intelligence company xAI, according to Bloomberg sources. Both privately held companies have informed select investors about the potential combination, with an announcement possible this week, though negotiations could extend longer or collapse entirely.

Key Financial Figures

• xAI valuation: $200 billion (as of fall fundraising round)
• SpaceX target: Seeking to raise $50 billion at a $1.5 billion valuation
• The article appears to contain a valuation error for SpaceX, as the figures seem inconsistent

Strategic Rationale

The merger would support Musk's ambitious plan to launch AI data centers into space, leveraging SpaceX's rocket capabilities and requiring substantial capital investment. SpaceX recently filed with the FCC requesting permission to deploy satellites that would harness solar power to support AI data demands while reducing environmental impact compared to terrestrial data centers.

Market Implications

A merger would significantly impact SpaceX's reported IPO plans. The Financial Times previously reported Musk was considering a mid-June public offering, which would be affected by this combination.

Companies and Assets Involved

• SpaceX: Operates major NASA contracts and Starlink satellite internet service
• xAI: Founded by Musk, operates the Grok chatbot

Musk currently serves as CEO of both entities, in addition to leading Tesla, Neuralink, and The Boring Company. The consolidation would create a unique aerospace-AI hybrid company positioning for space-based computing infrastructure.

Neither company has officially commented on the reports.