SpaceX acquires Musk’s AI firm xAI, integrates AI capabilities ahead of potential IPO

SpaceX acquires Elon Musk’s xAI, merging space and AI expertise. The combined entity, valued at 1.25 trillion dollars, plans an IPO in 2026 and brings Grok under SpaceX’s umbrella. By Gareema Bangad SpaceX has formally acquired Elon Musk’s AI company xAI in a landmark move reshaping the future of space and artificial intelligence. The company announced the integration on Monday, February 2, ahead of a major initial public offering planned later this year. In a brief update posted on its website, SpaceX said the move brings xAI’s advanced artificial intelligence capabilities into the SpaceX ecosystem, aligning the companies’ long-term missions to advance human progress through technology. According to the statement, the integration is aimed at combining SpaceX’s expertise in rockets, satellites, and space systems with xAI’s work in artificial intelligence, allowing for deeper collaboration across engineering, research, and mission-critical applications. Read more: Elon Musk wants to bring the biggest IPO of all time in 2026 - will he succeed? SpaceX said the companies already share a common vision under founder Elon Musk, and the announcement formalises their alignment as they work toward building technologies that can operate at scale, both on Earth and beyond. According to Reuters, the combined entity is valued at roughly $1.25 trillion, with SpaceX’s stake alone estimated at $1 trillion and xAI’s business valued at around $250 billion, making it one of the largest private technology mergers in history. Shares are expected to be priced in an IPO anticipated in mid-2026, potentially topping previous private market valuations. Read more: Elon Musk is stressing robots over cars. Here are three humanoid parts suppliers that Morgan Stanley recommends The deal unites one of the world’s leading private spaceflight firms with a rapidly expanding AI developer, creating what SpaceX described as a "vertically integrated" innovation powerhouse spanning rockets, satellite communications, artificial intelligence and space-based data infrastructure. The acquisition also brings Grok, xAI’s AI chatbot, and other AI assets under the SpaceX umbrella, further intertwining Musk’s ventures. SpaceX added that further updates on how the integration will be implemented will be shared in due course.