Elon Musk’s SpaceX has taken over his artificial intelligence start-up xAI, the company behind the Grok chatbot, further consolidating the billionaire’s business holdings. SpaceX confirmed the acquisition by posting a memo from Musk on its website, describing the merger as an «innovation engine» uniting AI, rockets, space-based internet and media.
Financial terms were not officially disclosed, but a source familiar with the deal said xAI is valued at $125 bn and SpaceX at $1 trln, making SpaceX the most valuable private company ever. Last month, Tesla also invested $2 bn into xAI.
AI and Robotics at the Core
Musk previously told Tesla investors that xAI would act as an «orchestra conductor» for factories employing autonomous robots. He added that Tesla plans to halt production of two car models to focus on manufacturing robots, a major strategic shift for the company. The xAI investment went ahead despite opposition from some Tesla shareholders, who had expressed concern over diverting resources to another Musk venture.
Industry analysts see the SpaceX-xAI merger as a step towards a potential public listing. Emily Zheng, senior analyst at Pitchbook, said consolidating Musk’s companies could make them more capital-efficient and attractive to investors ahead of an IPO.
Space-Based AI and Long-Term Ambitions
In the memo, Musk highlighted his long-term vision of space-based AI as a solution to the sector’s energy challenges. He said launching AI satellites would be the immediate focus, while also supporting broader ambitions such as establishing self-sustaining bases on the Moon, a civilisation on Mars and eventual expansion into the wider Universe.
Musk’s smaller ventures Neuralink and The Boring Company remain independent. xAI originally began as part of X, formerly Twitter, using its real-time text and data to train AI models. By 2025, it became independently incorporated and valued more highly than X.
xAI’s main product, the Grok chatbot, has faced regulatory scrutiny in Europe and the UK over concerns that it could generate sexualised images, prompting the company to introduce stricter user restrictions.
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