What company announced plans to acquire xAI in February 2026, valuing the combined entity at approximately $1.25 trillion?

In February 2026, a significant corporate development saw Elon Musk's aerospace company, SpaceX, announce its plans to acquire xAI, his artificial intelligence venture, in a deal that valued the combined entity at an estimated $1.25 trillion. This strategic move brought together two of Musk's prominent companies under one umbrella, aiming to create a highly integrated innovation engine. The rationale behind this merger was largely driven by Musk's ambitious vision for the future of artificial intelligence, particularly his belief that scaling AI capabilities will necessitate space-based data centers due to the immense power and cooling requirements that terrestrial solutions cannot sustainably meet.

This acquisition means that xAI's cutting-edge AI products, including its Grok chatbot and the social media platform X (which xAI had previously acquired), are now part of SpaceX. The integration of xAI into SpaceX further exemplifies a pattern of interlinking Musk's various business interests, consolidating his empire in preparation for what is anticipated to be one of the largest initial public offerings (IPOs) in history for SpaceX later this year.

The newly formed entity leverages SpaceX's expertise in rocket technology and its extensive Starlink satellite internet constellation to support the development and deployment of advanced AI. By combining these capabilities, the merged company aims to overcome the current limitations of AI infrastructure, projecting that space will offer the most economical and scalable solution for AI computing within a few years. This bold strategy positions SpaceX not merely as a space exploration company, but as a vertically integrated technology powerhouse poised to drive innovation both on and off Earth.