- SpaceX has officially acquired xAI, forming a single entity valued at $1.25 trillion.
- Elon Musk stated the merger will position the company to generate ultra-cheap AI compute from space within 2-3 years.
- The deal precedes a highly anticipated, multi-billion dollar IPO for the newly combined company.
Elon Musk announced on Monday that the merger between his companies SpaceX and xAI is final, creating a vertically-integrated technology giant. The news was confirmed by a tweet from Watcher.Guru on February 2, 2026.
Musk framed the union as “the next book in SpaceX and xAI’s mission” to extend consciousness to the stars. Consequently, the combined company’s valuation now stands at a staggering $1.25 trillion.
His strategic vision hinges on generating Artificial Intelligence compute power off-planet. “My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space,” Musk stated.
He argued terrestrial data centers cannot sustainably meet the world’s exploding AI electricity demands. Consequently, he believes space-based operations present the only viable path for long-term, large-scale AI development.
This monumental transaction combines SpaceX‘s previous $800 billion valuation with xAI‘s approximate $230 billion worth. Meanwhile, it adds a new dimension to SpaceX‘s impending initial public offering.
The planned IPO could aim to raise about $50 billion. However, the final valuation may adjust from earlier $1.5 trillion projections following this new corporate structure.
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