Elon Musk's SpaceX has acquired his artificial intelligence startup xAI in a $250 billion deal—the largest acquisition in corporate history, surpassing Vodafone's $203 billion purchase of Mannesmann in 2000. The combined entity is valued at $1.25 trillion, with SpaceX contributing $1 trillion and xAI $250 billion. The merger consolidates three of Musk's companies under one roof: SpaceX's rocket and satellite businesses, xAI's Grok chatbot and AI infrastructure, and X (formerly Twitter), which xAI absorbed in March 2025. Within days of the merger announcement, Musk began publicly articulating the orbital data center vision, appearing on the 'Cheeky Pint' podcast in early February 2026 to argue that solar panels produce five times more power in space than on Earth, making orbital AI infrastructure economically superior to terrestrial data centers by 2028.
The deal sets up what could become the largest initial public offering ever. SpaceX is targeting a June 2026 IPO that could raise $50 billion—nearly double Saudi Aramco's record $29 billion listing in 2019. Regulatory momentum is building: the FCC accepted SpaceX's January 2026 filing for up to one million orbital data center satellites on February 5, 2026, and FCC Chairman Brendan Carr publicly shared the filing on X, signaling administrative support. Musk has marked 2028 as a tipping point year when orbital AI will become 'the most economically compelling place to put AI,' with predictions that within five years SpaceX will launch more AI computing capacity annually than exists cumulatively on Earth. The merger also provides xAI with desperately needed capital: the AI startup is burning approximately $1 billion per month as it races to compete with OpenAI and Anthropic.
