Elon Musk in Talks for Potential Merger of SpaceX and xAI

Elon Musk is reportedly deep into discussions to combine his rocket venture, SpaceX, with the artificial intelligence firm xAI.

Both companies, which are privately owned, have informed certain investors of this potential merger, as noted by a source acquainted with the situation. An announcement could possibly arrive within the week, but, of course, there’s a chance that talks might extend further or even fall through entirely.

SpaceX and xAI have yet to respond to inquiries regarding this matter.

xAI, which operates the social media platform known as X, is also behind the Grok chatbot and achieved a $200 billion valuation last fall. Meanwhile, SpaceX, notable for its significant NASA rocket contracts and the Starlink internet service, is reportedly looking to raise $50 billion with a valuation of $1.5 billion, according to various reports.

This potential merger is said to affect SpaceX’s plans for going public. Recently, there were reports indicating that Musk hopes to initiate an IPO in mid-June, aligning it with a rare planetary event and his upcoming 55th birthday.

Musk has expressed interest in launching an AI data center into space, an expensive undertaking that will necessitate SpaceX’s expertise and a considerable amount of funding.

Just last week, SpaceX sought clearance from the Federal Communications Commission to launch as many as 1 million satellites. According to filings, these satellites aim to meet the rapidly increasing need for data spurred by AI.

“By operating with minimal maintenance costs and utilizing nearly constant solar power, these satellites promise cost and energy efficiencies while lessening environmental impacts compared to traditional ground-based data centers,” SpaceX mentioned in its application.

Musk holds leadership roles at both SpaceX and xAI, in addition to being the CEO of Tesla, Neuralink, and The Boring Company.