Inside Musk’s SpaceX-xAI Megamerger

Elon Musk rammed through the combination of his space company, SpaceX, with his AI startup, xAI, on Monday, merging the shiniest jewel in his business empire with his most money-losing firm. The deal—which valued xAI at $250 billion and SpaceX at $1 trillion, according to people familiar with the situation—comes as xAI battles to catch up to rivals such as OpenAI, Google and Anthropic.

The deal shows how quickly the world’s richest man is moving to gain a fundraising advantage in the expensive AI race. On a call with about 100 SpaceX investors Monday afternoon, Chief Financial Officer Bret Johnsen gave assurances that the deal wouldn’t delay its initial public offering, planned for the summer or fall, said one person on the call and another briefed on it.

The company had already been in talks with anchor investors to invest a large chunk of the $50 billion the company hopes to raise in the IPO, Johnsen told them, according to one of the people. The merger with xAI moved quickly, with Musk as the controlling shareholder in both companies.