NEW YORK (Reuters) — Elon Musk’s SpaceX and xAI are in discussions to merge forward of a blockbuster public providing deliberate for later this 12 months. The mixture would deliver Musk’s rockets, Starlink satellites, the X social media platform and Grok AI chatbot beneath one roof, in response to an individual briefed on the matter and two latest firm filings seen by Reuters.
The plan, which Reuters is reporting completely, would give recent momentum to SpaceX’s effort to launch information facilities into orbit as Musk battles for supremacy within the quickly escalating AI race in opposition to tech giants like Google, Meta and OpenAI.
Musk, the world’s richest man, is the CEO of each the non-public area firm SpaceX and the unreal intelligence firm xAI, which controls his social media platform X. He additionally runs electrical automaker Tesla, tunnel firm The Boring Co. and neurotechnology firm Neuralink.
Musk, SpaceX, and xAI didn’t reply to requests for remark.
Under the proposed merger, shares of xAI could be exchanged for shares in SpaceX. Two entities have been arrange in Nevada to facilitate the transaction, the particular person stated.
Reuters couldn’t decide the worth of the deal, its main rationale, or its potential timing.
Corporate filings in Nevada present that these entities have been arrange on January 21. One of them, a restricted legal responsibility firm, lists SpaceX and Bret Johnsen, the corporate’s chief monetary officer, as managing members, whereas the opposite lists Johnsen as the corporate’s solely officer, the filings present.
The filings don’t include extra details about the aim of the businesses or their function in any deal.
Johnsen didn’t reply to a Reuters request for remark.
The particular person, who requested anonymity as a result of the discussions are confidential, stated that some xAI executives could possibly be given the choice to obtain money as a substitute of SpaceX inventory as a part of the deal. A closing settlement, nonetheless, hasn’t been signed, and the timing and construction of the transaction stay fluid, the particular person cautioned. SpaceX is already the world’s most precious privately held firm, final valued at $800 billion in a latest insider share sale. xAI was valued at $230 billion in November, in response to the Wall Street Journal. Reuters and different media have reported that SpaceX plans to go public a while this 12 months, with a valuation anticipated above $1 trillion.
SpaceX’s Starship rocket 38 launches throughout the eleventh check flight on October 13, 2025 as seen from South Padre Island in Texas. (Photo by GABRIEL V. CARDENAS/AFP through Getty Images)
GABRIEL V. CARDENAS through Getty Images
DATA CENTERS IN SPACE
Through xAI, Musk is constructing out a large supercomputer for AI coaching in Memphis, Tennessee, referred to as Colossus. Last 12 months, SpaceX agreed to take a position $2 billion in xAI as a part of the startup’s $5 billion fairness fundraising, the Wall Street Journal reported on the time.
Speaking in Davos, Switzerland, final week, the billionaire entrepreneur stated “the lowest cost place to put AI will be in space. And that will be true within two years, maybe three at the latest.” Space-based AI processing, powered by photo voltaic vitality, is aimed toward chopping the price of producing the computing energy that runs and trains AI fashions corresponding to xAI’s Grok. Jeff Bezos’ Blue Origin introduced a brand new high-capacity spine community of hundreds of satellites, whereas Google is researching space-based information facilities with its Project Suncatcher.
Building information facilities in area stays a dangerous proposition, particularly with AI funding evolving so quickly and infrequently unpredictably. Analysts and a few trade executives have questioned whether or not the envisioned cuts in vitality consumption are well worth the added prices of tailoring these techniques for area.
Folding xAI into SpaceX might enhance the corporate’s footing for main protection contracts on the Pentagon, which has sought to ramp up AI adoption in its army networks, stated Caleb Henry of area analysis and advisory agency Quilty Analytics.
U.S. Defense Secretary Pete Hegseth earlier this month visited SpaceX’s Starbase improvement website in Texas, the place he stated xAI’s language mannequin and its chat platform Grok shall be built-in into army networks as a part of the Pentagon’s “AI acceleration strategy,” aimed toward dashing up the army’s decision-making and planning.
xAI has a contract value as a lot as $200 million to offer Grok merchandise to the Pentagon.
Starlink and its nationwide safety variant Starshield already rely closely on synthetic intelligence, corresponding to for automated satellite tv for pc maneuvers in orbit. Starshield, beneath a contract with a U.S. intelligence company, is constructing a community of tons of of categorised satellites geared up with completely different sensors which might be anticipated to make use of AI to assist observe transferring targets on Earth.
xAI’s ‘Grok’ brand is seen displayed on a cell phone display in entrance of an image of Elon Musk in a photograph illustration. (Photo by Didem Mente/Anadolu through Getty Images)
LATEST MERGER BETWEEN MUSK COMPANIES
The deal wouldn’t be Musk’s first effort to mix companies he controls. In 2025, he folded social media platform X into xAI in a share swap that gave the artificial-intelligence startup entry to the platform’s information and distribution. Before that in 2016, he used Tesla inventory to purchase his solar-energy firm SolarCity. Earlier this month, xAI raised $20 billion in an upsized Series E funding spherical, exceeding its $15 billion goal at a valuation of $230 billion. Tesla, Musk’s electrical automobile firm, on Wednesday stated it agreed to take a position about $2 billion in xAI.
Founded in 2002, SpaceX disrupted the worldwide area trade with its reusable Falcon rockets, which proved important to the swift launch of Starlink, a satellite tv for pc broadband community now consisting of hundreds of satellites in area.
SpaceX has lined up banks for an IPO that would come as early as this 12 months. (Reporting by Echo Wang and Joey Roulette; Additional reporting by Milanna Vinn, Sabrina Valle and David Jeans; Editing by Joe Brock, Dawn Kopecki and Michael Learmonth)
