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

In February 2026, the technology company SpaceX announced its acquisition of xAI, an artificial intelligence firm also founded by Elon Musk. This all-stock transaction resulted in a combined entity valued at approximately $1.25 trillion, making it one of the most significant mergers in the tech industry. The decision to bring xAI under the SpaceX umbrella was driven by a strategic vision to integrate advanced AI capabilities with space exploration and infrastructure.

This merger reflects Elon Musk's belief that space-based computing will become the most efficient and cost-effective method for AI operations within a few years. Terrestrial data centers face increasing challenges related to immense electricity demands and cooling requirements. By leveraging SpaceX's extensive Starlink satellite network (Review) and plans for future orbital data centers, the combined entity aims to establish a scalable and energy-efficient AI infrastructure in space, providing robust computing support for xAI's development.

SpaceX, renowned for its advancements in reusable rocket technology and satellite internet, gains a powerful AI arm through xAI, which is focused on understanding the universe and developing generative AI models like Grok. This integration positions the unified company to accelerate innovation in both space technology and artificial intelligence, potentially impacting global AI competition and setting the stage for SpaceX's anticipated initial public offering later in 2026.