Elon Musk Announces Merger of SpaceX and xAI Valued at $1.25 Trillion
In a significant move underscoring Elon Musk's ambitions in artificial intelligence and space exploration, the billionaire entrepreneur announced the merger of his companies, SpaceX and xAI, in a deal that values the combined entity at $1.25 trillion.
According to sources cited by Bloomberg, SpaceX is valued at approximately $1 trillion, while xAI holds a valuation of $250 billion.
The merger is structured entirely in stock and will unite the two largest private companies globally, setting the stage for a public offering later this year, with anticipated share prices around $526.59.
Musk articulated that the merger aims to establish "the most ambitious and vertically integrated innovation engine on Earth and in space," integrating artificial intelligence, rocket technology, satellite internet, and mobile communications, while also serving as a crucial platform for real-time information and freedom of expression.
He further explained that the most cost-effective method for conducting extensive AI computations in the next two to three years will be in space, facilitating rapid advancements in model development and data processing, which could lead to significant scientific and technological progress beneficial to humanity.
The newly formed company intends to deploy up to one million satellites into Earth's orbit, as part of its strategy to enhance the Starlink network and secure funding for the capital-intensive operations of xAI.
It is noteworthy that Musk had previously acquired Twitter, rebranding it as X, and merged it with xAI in a $33 billion transaction, reflecting his approach to consolidating resources, efficiencies, and technologies across his ventures.
Unlike some of his other initiatives, SpaceX stands out as one of Musk's most successful enterprises, being the sole American firm capable of routinely transporting astronauts to the International Space Station, while generating increasing revenue from its satellite network, making it a vital financial resource for future AI projects.
