Report: SpaceX is in advanced merger talks with xAI and may announce an agreement as early as this week.

SpaceX, owned by Elon Musk, is in advanced negotiations to merge with artificial intelligence company xAI, marking the latest move in accelerating the integration of Musk’s business empire. On Monday local time, Bloomberg reported, citing people familiar with the matter, that the two companies have already disclosed the plan to some investors. Some sources said that the agreement could be announced as early as this week, though talks are ongoing and the negotiations may take longer or eventually fall apart. If the merger goes through, Musk’s rocket business, the Starlink satellite network, social media platform X, and the Grok AI chatbot will all be housed under a single corporate system. According to previous reports by Reuters, under the proposed merger plan, xAI shares will be converted into SpaceX shares. Sources stated that to facilitate the transaction, two entities have been established in Nevada. Business registration documents in Nevada show both entities were formed on January 21. One is a limited liability company, listing SpaceX and its CFO Bret Johnsen as managing members; the other lists only Johnsen as the sole executive. As part of the deal, some xAI executives may be allowed to opt for cash rather than SpaceX shares. However, Reuters notes that no final agreement has been signed, and the timing and structure of the transaction remain uncertain. Multiple Merger Plans Moving Forward SpaceX has also discussed the possibility of merging with Tesla, an idea being pushed by certain investors. Some sources said that any deal could attract significant interest from infrastructure funds and Middle Eastern sovereign wealth funds; one person added that large-scale financing might be required to support the related transaction. One of Musk’s grand visions for SpaceX is to deploy data centers into space for complex AI computations. Different merger plans may serve different parts of this vision. If the technical challenges can be solved, xAI stands to gain significantly from computing power provided by SpaceX’s orbital data centers. Meanwhile, Tesla’s manufacturing capabilities in energy storage systems could help SpaceX use solar power in space to supply electricity to these data centers. Through xAI, Musk is building a large supercomputer for AI training ("Colossus") in Memphis, Tennessee. Last year, SpaceX agreed to invest $2 billion in xAI, as part of the startup’s $5 billion equity financing. Musk said last week at Davos in Switzerland: “Putting AI into space will be the cheapest solution, and it will be reality within two years, three years at most.” SpaceX’s IPO Plans and Valuation SpaceX is now the world’s most valuable private company, with its latest internal share transaction putting its valuation at $800 billion. According to previous media reports, the valuation is expected to surpass $1 trillion. SpaceX is considering going public around June, potentially coinciding with Musk’s birthday, and may raise up to $50 billion. This would make it the largest IPO in history. SpaceX has already lined up investment banks for the IPO, with Bank of America, Goldman Sachs, JPMorgan, and Morgan Stanley expected to play major roles in underwriting. Robinhood is seeking a key role in SpaceX’s heavyweight IPO. Earlier this month, xAI raised $20 billion in a heavily oversubscribed Series E round, above the original $15 billion target, giving it a valuation of $230 billion. On Wednesday, Tesla said it had agreed to invest about $2 billion in xAI. This is not Musk’s first time integrating his controlled companies. In 2025, he merged social media platform X into xAI via a share swap, allowing the AI startup to access platform data and distribution channels. Risk Warning and Disclaimer The market carries risks—invest cautiously. This article does not constitute personal investment advice and does not take into account individual users’ specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable to their own circumstances. All investment decisions based on this article are at your own risk.