Numbers and Questions Behind Musk’s SpaceX-xAI Merger

SpaceX has acquired xAI in an all-stock transaction that creates a privately valued, combined enterprise worth about $1.25 trillion, with Elon Musk controlling both companies. The stock is currently private, and SpaceX plans to go public later this year. The deal valued SpaceX at roughly $1 trillion and xAI at about $250 billion, and required SpaceX to issue roughly $250 billion of new stock, significantly diluting existing stakes.

SpaceX reportedly earned about $8 billion on more than $15 billion in revenue last year; xAI had raised about $42 billion since its 2023 founding and was reported to be burning roughly $1 billion a month. Musk described the merger as creating a vertically integrated engine to pursue space-based A.I.

data centers, arguing they are the only way to scale long term. The proposition raises technical and cost challenges—cooling, radiation shielding and the need for a roughly tenfold drop in launch costs—and prompted questions about whether the merger complicates SpaceX’s I.P.O.

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