SpaceX in Merger Talks With xAI Ahead of Potential IPO

SpaceX and xAI are in discussions about a possible merger ahead of a planned public offering later this year, according to a source familiar with the matter and recent corporate filings reviewed by Reuters.

Under the proposed deal, shares of xAI would be exchanged for SpaceX stock, effectively bringing Elon Musk’s key ventures, including rockets, Starlink satellites, the X social media platform, and the Grok AI chatbot, under a single corporate structure. Two entities established in Nevada earlier this month are said to be linked to facilitating the transaction, though the exact terms, valuation, and timing remain unclear.

The talks would support Elon Musk’s broader ambition to expand artificial intelligence infrastructure into space. Musk has said that space-based, solar-powered data centres could sharply reduce the cost of running and training AI models within a few years. Folding xAI into SpaceX could also strengthen the group’s position in securing defence and government contracts tied to AI and satellite technology.

SpaceX was last valued at around $800 billion in a recent insider share sale, while xAI was valued at about $230 billion in November. Reuters has previously reported that SpaceX is preparing for an IPO that could value the company at over $1 trillion.

Neither SpaceX nor xAI commented on the reported discussions.

The potential merger would mark another major consolidation of Musk-controlled businesses, signalling a tighter integration of space, AI, and defence ambitions ahead of a highly anticipated SpaceX IPO.

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