SpaceX–xAI Merger Talks Intensify Ahead of Planned IPO

A Potential Mega‑Merger in the Making

Elon Musk’s SpaceX and artificial intelligence firm xAI are in active discussions to merge before SpaceX’s long‑anticipated public offering, according to a source familiar with the matter and recent corporate filings. The proposed merger would consolidate several of Musk’s ventures—including SpaceX’s launch business, the Starlink satellite network, the X social media platform, and xAI’s Grok chatbot—under a single corporate umbrella.

If completed, the deal would mark one of the most sweeping corporate integrations in Musk’s career, aligning space infrastructure with AI development at a moment when global competition in artificial intelligence is accelerating.

Corporate Filings Reveal Early Structural Moves

Two new entities were registered in Nevada on January 21 to facilitate the potential transaction. One entity lists SpaceX and its chief financial officer, Bret Johnsen, as managing members, while the second lists Johnsen as its sole officer. The filings do not disclose the purpose or valuation of the proposed merger, but their timing aligns with internal discussions described by the source.

Under the preliminary plan, xAI shares would be exchanged for SpaceX shares. Some xAI executives may be offered cash instead of equity, though no final terms have been agreed upon.

Strategic Rationale: AI in Orbit

The merger would bolster SpaceX’s push to deploy orbital data centers—an ambitious effort to position AI computing infrastructure in space. Musk has argued that space‑based data centers could eventually outperform terrestrial systems by leveraging abundant solar energy and reduced cooling costs. The integration of xAI’s supercomputing initiatives with SpaceX’s launch capabilities and Starlink’s global connectivity could accelerate this strategy.

xAI is currently building a massive AI training supercomputer, known as Colossus, in Memphis, Tennessee, while SpaceX has already invested billions into the startup’s development.

Valuations and IPO Context

SpaceX is the world’s most valuable privately held company, recently valued at $800 billion in an insider share sale. xAI, meanwhile, was valued at $230 billion as of November, according to the Wall Street Journal.

Reports indicate that SpaceX is preparing for a blockbuster IPO later this year, with expectations that its valuation could exceed $1 trillion. A merger with xAI could reshape investor expectations by tying SpaceX’s revenue prospects to the rapidly expanding AI sector.

Confidential Talks, Uncertain Timeline

Despite the momentum, the source emphasized that no final agreement has been signed and that both the structure and timing of the deal remain subject to change. Musk, SpaceX, and xAI did not respond to requests for comment.

Regulatory scrutiny—particularly around defense contracts and AI infrastructure—could influence the pace or feasibility of the merger.