Elon Musk confirms SpaceX merger with AI platform behind Grok in $1.25tn deal

Elon Musk’s SpaceX will merge with his artificial intelligence start-up as the tech titan looks to consolidate his business interests.

Aerospace firm SpaceX announced plans to buy xAI, the company behind X’s Grok chatbot, to bring AI, rockets and satellites under one company.

While terms of the deal were not disclosed, Reuters reported it valued xAI at $125billion (£91billon) and SpaceX at $1trillion, making it the most valuable private company in history. 

The deal values the company at $1.25trn 

In an update posted to its website, Musk said: ‘This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars!’ 

Investors in xAI will reportedly receive 0.1433 shares of SpaceX for every share of xAI as part of the deal. 

The acquisition comes as Musk pursues plans to put data centres and satellites in space to power AI.

Musk said: ‘In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses!’

‘My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space.’

The announcement comes ahead of SpaceX’s blockbuster IPO, which is expected this summer. 

It is the latest sign that Musk is bringing his business interests under one roof, after xAI acquired the X platform, formerly Twitter, and Tesla recently announced $2billion investment into the AI firm.

Musk told investors he saw the firm as a future ‘orchestra conductor’ for Tesla’s robotic production lines. 

Tesla also announced it would end the production of two of its most popular car models, with the factory converted to produce the upcoming Optimus robot.