SpaceX-xAI $1.25 Trillion Merger Official: Largest M&A in History Opens Era of Space Data Centers

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Update (2026-02-02): SpaceX-xAI merger officially announced. Confirmed at $1.25 trillion valuation, breaking the all-time largest M&A record.

SpaceX-xAI Merger Official: $1.25 Trillion, Largest M&A in History

  • SpaceX has officially acquired xAI. Combined valuation of $1.25 trillion sets the all-time M&A record
  • xAI shareholders will receive 0.1433 shares of SpaceX at $526.59 per share
  • Musk cited building space data centers as the core reason for the merger

What Happened?

Bottom line: Musk actually did the merger. On February 2nd, SpaceX officially acquired xAI.[TechCrunch]

Combined enterprise value is $1.25 trillion. SpaceX is valued at $1 trillion (up from $800 billion in December 2025 secondary sale), xAI at $250 billion.[Bloomberg]

Deal structure is all-stock exchange. xAI shareholders receive 0.1433 shares of SpaceX at $526.59 per share. xAI employees also have a cash-out option at $75.46 per share.[CNBC]

This is the largest M&A in history. It breaks Vodafone’s $203 billion acquisition of Mannesmann in 2000 after 25 years.[Fortune]

Why Does This Matter?

The key is space data centers. Musk stated in an internal memo that “within 2-3 years, space will become the lowest-cost location for AI computation.”[TechCrunch]

SpaceX recently applied to the FCC for permission to launch 1 million satellites. This is part of the “orbital data center” project. The goal is to combine the Starlink satellite network (currently over 9,000 satellites) with xAI’s Grok model.

Honestly, the concept itself is brilliant. The logic is to solve terrestrial data center power and cooling issues in space. But feasibility remains questionable. Satellite communication latency, hardware maintenance, and cosmic radiation issues remain unsolved.

Personally, I see a more realistic reason. xAI is currently burning $1 billion monthly. SpaceX generated $8 billion profit on $15-16 billion revenue in 2025. A cash-generating company absorbed a cash-burning one.

What’s Next?

IPO is next. At $1.25 trillion valuation, it would immediately enter the Top 10 US public companies by market cap. June listing is likely.[Sherwood News]

Tesla merger possibility has been ruled out for now. The SpaceX-Tesla scenario discussed in previous reports was not included in this announcement.

But regulatory risk remains. We need to watch how FTC and DOJ view this mega-consolidation of space and AI assets. Musk’s political influence is a variable.

Frequently Asked Questions (FAQ)

Q: What happens to xAI shareholders?

A: They receive 0.1433 shares of SpaceX at $526.59 per share. Employees can choose cash-out at $75.46 per share. Since xAI acquired X (Twitter) last year, X shareholders also indirectly gain SpaceX shares. First public trading opportunity opens after IPO.

Q: Are space data centers really possible?

A: Technically, yes. SpaceX’s application for 1 million satellite permits to the FCC is real. But timing and economics are uncertain. Musk claims space will be the lowest-cost AI computation location within 2-3 years, but satellite communication latency and hardware maintenance issues remain.

Q: When can regular investors invest?

A: When the IPO happens. June listing is likely, and at $1.25 trillion it would be one of the largest IPOs ever. SpaceX has been private, making it inaccessible to regular investors. This merger opens the opportunity to invest in xAI and Starlink business at once.

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