Elon Musk's SpaceX acquires xAI in record-setting deal ahead of mega IPO

Elon Musk's SpaceX Acquires AI Startup xAI in Record-Breaking Deal

SpaceX, the rocket venture founded by billionaire Elon Musk, has acquired xAI, an artificial-intelligence startup, in a deal that sets a new record for the world's largest M&A transaction.

Deal Details

• Value: The combined company is valued at $1 trillion, with SpaceX valued at $1 trillion and xAI valued at $250 billion.
• Pricing: Shares of the combined company are expected to price at about $527 each.
• Previous Valuations: SpaceX was last valued at $800 billion in a recent insider share sale, while xAI was last valued at $230 billion in November.

Impact on Musk's Business Empire

The deal further consolidates Musk's far-flung business empire and fortunes into a tighter, mutually reinforcing ecosystem, which some investors and analysts informally call the "Muskonomy."

SpaceX's Plans

SpaceX is planning an initial public offering (IPO) that could raise as much as $50 billion and value the company at about $1.5 trillion.

AI Sector Competition

• Competitors: SpaceX will compete with rivals like Alphabet's Google, Meta, Amazon-backed Anthropic, and OpenAI in the AI sector.
• Government Scrutiny: The deal could draw scrutiny from regulators and investors over governance, valuation, and conflicts of interest given Musk's overlapping leadership roles across multiple firms.

Background on xAI

xAI was founded by Elon Musk and has developed AI chatbot Grok, satellite communications company Starlink, and social media company X.

Quotes from Musk

"This marks not just the next chapter, but the next book in SpaceX and xAI's mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!" Musk said.

Record-Breaking Deal

The deal sets a new record for the world's largest M&A transaction, surpassing the $203 billion Vodafone deal in 2000.