Elon Musk attends the Annual Meeting of the World Economic Forum in Davos, Switzerland. (Photo: AP)
Elon Musk’s space company SpaceX has merged with his artificial intelligence business xAI, bringing together two parts of his group as SpaceX prepares for a public listing later this year, according to The Guardian.
The companies confirmed the deal on Monday in a statement on SpaceX’s website. They said the merger would combine rockets, artificial intelligence, satellite internet and direct-to-device communications under one structure.
What the deal includes
Under the merger, SpaceX will take control of xAI’s assets, including the Grok chatbot and the social media platform X. The companies said the combined business would link AI development with space launch systems and satellite networks.
In the statement, the companies said the merger would create “the most ambitious, vertically integrated innovation engine on (and off) Earth”.
Why Musk is merging the companies
The statement said the deal was driven by plans to build datacentres and power systems in space to support artificial intelligence.
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“Current advances in AI are dependent on large terrestrial datacenters, which require immense amounts of power and cooling,” the statement said. It added that global electricity demand for AI could not be met on Earth “without imposing hardship on communities and the environment”.
“In the long term, space-based AI is obviously the only way to scale,” it said.
Musk has increasingly linked his companies in recent months. xAI bought the platform X in early 2025 in an all-share deal, while Tesla said last month it planned to invest $2bn in xAI.
SpaceX told investors in December that it expected the company to be valued at about $800bn, as it continues to win satellite launch contracts and government work.
xAI has also raised fresh funding. Last month it announced a $20bn investment round that valued the company at $230bn, despite criticism of its Grok chatbot.
Reports of the merger were first published by Reuters. Musk appeared to confirm the deal by replying “yes” to a post on X discussing the reports.
The announcement follows a difficult period for Musk after Tesla reported falling revenue. It also comes days after US authorities released documents showing Musk had exchanged emails with Jeffrey Epstein, which Musk said could be misread and used to attack him.
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Elon Musk attends the Annual Meeting of the World Economic Forum in Davos, Switzerland. (Photo: AP) 
