A SpaceX Falcon Heavy rocket carrying the National Oceanic and Atmospheric Administration's (NOAA) weather satellite Geostationary Operational Environmental Satellite U (GOES-U) lifts off from Launch Complex 39A at NASA's Kennedy Space Center, Florida, June 25, 2024.
Elon Musk is combining rocket maker SpaceX with his artificial intelligence startup, xAI, as the combined entity gears up for a massive IPO.
The deal was announced on Monday in a blog post from SpaceX, which said it's forming "the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet," and its X social media platform.
The combined company is expected to price shares in an IPO that would value it at $1.25 trillion, Bloomberg reported. Public records with the state of Nevada obtained by CNBC indicate that the deal was completed on Feb. 2, with Space Exploration Technologies Corp. listed as the "managing member" of X.AI Holdings.
The transaction marks the largest tie-up in Musk's vast business portfolio and brings together two companies that have been soaring in value on the private markets. SpaceX opened a secondary share sale last year at a valuation of $800 billion, while xAI was valued at about $230 billion in a $20 billion round that closed earlier this year.
Tesla, Musk's electric vehicle maker and the source of most of his liquid wealth, said last week that it's agreed to invest about $2 billion into xAI.
Early Last year, Musk expanded xAI by merging it with his social network X, formerly known as Twitter. XAI is facing a host of new regulatory probes by authorities in Europe, India and California after its Grok AI tools enabled users to easily generate and share sexualized images of children and non-consensual intimate images of adults, mostly women.
Musk founded SpaceX in 2002 and has turned it into the leading provider of orbital launch services through contracts with NASA. SpaceX also owns the Starlink satellite service, which has more than 9,000 satellites in orbit and roughly 9 million customers.
In 2023, Musk launched xAI as a potential competitor to OpenAI, which kicked off the generative AI boom with the release of ChatGPT late the prior year. Musk was one of the co-founders of OpenAI in 2015, when the project was started as a nonprofit AI lab. He left in 2018, and is now involved in a heated legal battle with the company and CEO Sam Altman.
Reuters reported late last week that SpaceX generated an estimated $8 billion in profit on $15 billion to $16 billion of revenue in 2025, citing two people familiar with the company's results.
... continue reading