SpaceX and xAI are in active merger discussions that could unite Elon Musk's rocket empire with his artificial intelligence startup before SpaceX goes public mid-year, according to Reuters. The deal would create an unprecedented AI-space infrastructure company capable of launching data centers into orbit, fundamentally reshaping both the AI compute race and commercial space industry. With SpaceX eyeing a mid-June IPO and xAI already embedded in Musk's corporate ecosystem, the merger talks signal a bold bet that the future of artificial intelligence depends on escaping Earth's physical constraints.
SpaceX and xAI are hammering out what could become one of the most audacious corporate combinations in tech history. The two Elon Musk-controlled companies are deep in merger talks that would unite America's dominant private rocket launcher with an aggressive AI startup, according to Reuters reporting citing sources familiar with the discussions. The timing is deliberate: SpaceX is targeting a mid-June public offering, and folding xAI into the rocket company before that debut could fundamentally reshape the investment thesis.
The strategic rationale centers on an idea that sounds ripped from science fiction but is increasingly serious among AI infrastructure planners. SpaceX wants to launch data centers into space, and xAI would provide the AI workloads to justify that orbital compute capacity. Energy constraints and cooling challenges have become bottlenecks for AI training on Earth. Moving compute infrastructure to orbit solves thermal dissipation through the vacuum of space and taps into abundant solar power, though it introduces new challenges around latency and hardware servicing.
Neither company responded to requests for comment from The Verge, and the specific valuation or timeline for a potential deal remains unclear. But the that SpaceX is zeroing in on that June IPO window, which would make it one of the year's highest-profile public debuts. SpaceX was last valued at $350 billion in private markets, making it the most valuable startup on the planet. xAI, meanwhile, has seen its valuation surge since launching Grok, its conversational AI that competes with OpenAI's ChatGPT and Anthropic's Claude.
