SpaceX announced on Monday that it has acquired xAI, merging two of Elon Musk’s most high-profile companies into what is now the most valuable private company in the world, CNN reported.
Musk said in a statement on SpaceX’s website, “This marks not just the next chapter, but the next book in SpaceX and xAI’s mission."
The merger highlights the financial demands facing xAI as it competes in the rapidly expanding artificial intelligence sector, as well as the growing role AI is expected to play in the future of space exploration.
SpaceX was valued at 800 billion dollars in a secondary share sale in December 2025, while xAI was valued at 230 billion dollars in its most recent funding round in January, according to PitchBook.
The move also reflects the race among major tech companies to secure computing resources needed for AI development. Musk wrote, “Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space."
On Friday, SpaceX sought permission from the Federal Communications Commission to launch a constellation of one million satellites. The filing said the goal is to create a network of solar-powered data centers to “accommodate the explosive growth of data demands driven by AI." Musk said he believes the “lowest cost way to generate AI compute will be in space" within two to three years.
Musk’s xAI also owns the social media platform X and its chatbot Grok, which recently faced criticism for generating sexual images of mostly women, many of them real people.
Grok previously faced criticism for generating offensive and extremist content. Following an update on July 7, the chatbot produced responses praising Adolf Hitler, described Jewish representation in Hollywood as "disproportionate," and denounced "anti-white hate" on the platform X.
xAI later issued an apology, stating it had corrected the instructions that led to the incidents. The company introduced a new version of the chatbot, Grok 4, before the incident.
In August, X briefly suspended Grok after it made statements accusing Israel and the US of committing genocide in Gaza.
Despite the controversies, investors continue to pour money into AI. In January, xAI announced it had raised 20 billion dollars from investors including Fidelity Management and the Qatar Investment Authority.
CNN noted that there has long been overlap between SpaceX and xAI, with several employees working at both companies.