After merging his artificial intelligence and social media company xAI into his rocket maker SpaceX, Elon Musk has created what is now the world’s most valuable private company. Forbes wrote that the move values the combined company at $1.25 trillion, with SpaceX valued at $1 trillion and xAI at $250 billion.
Founded in 2002, SpaceX has changed the face of the space industry through commercial satellite launches, reusable rockets, and NASA partnerships. xAI, on the other hand, was launched in 2023 to compete with big AI developers such as OpenAI. It has faced financial challenges recently, with its main product Grok coming under scrutiny several times over its AI image generation feature, BBC reported.
Musk seeks to combine space infrastructure with artificial intelligence as he merges these two companies. In a memo to employees, the billionaire said the merger will help build a “vertically integrated innovation engine” that spans rockets, satellite internet, direct-to-device communications, AI systems, and the social media platform X.
He said he believed space would solve the energy needs faced by AI firms.
“In the long term, space-based AI is obviously the only way to scale,” he wrote.
Sources say SpaceX financed the deal by issuing new shares, adding that the merged company may pursue an initial public offering around June. Musk aims to raise around $50 billion.
“This is not just a financial merger,” Longevity quoted one technology analyst as saying. “It’s a strategic convergence of data, computing power, and physical systems in orbit.”
This is the second time in less than a year that Musk has merged his companies. Last March, he combined his artificial intelligence company xAI with the X social media company in a deal that valued xAI at $80 billion and X at $33 billion.
The latest deal brought Musk $84 billion and increased his fortune to a record $852 billion.
Before the deal, Musk owned about 42% of SpaceX, which is about $336 billion, based on a tender offer launched in December that valued the rocket maker at $800 billion, Forbes wrote. The business magazine said the South Africa-born billionaire also owned a 49% stake in xAI worth $122 billion. Following the merger, his stake in the combined company is estimated at 43%, or $542 billion, making SpaceX his most valuable asset now.
