Technology & Science
SpaceX Acquires xAI, Forging a $1.25 Trillion Musk Colossus Ahead of IPO
Elon Musk folded debt-laden xAI into SpaceX in an all-stock transaction completed 3 Feb 2026, positioning the enlarged group for a record IPO later this year.
Focusing Facts
- Deal tags SpaceX at $1 trillion and xAI at $250 billion, creating the most valuable private company on Earth.
- Internal memo says SpaceX still targets a June 2026 listing that could raise up to $50 billion at an ~$800 billion–$1 trillion float value.
- xAI has been burning nearly $1 billion per month and took on about $5 billion in debt, which now shifts to SpaceX’s balance sheet.
Context
Musk’s roll-up echoes the 1985 GM-EDS purchase and, more ominously, the 2000 AOL-Time Warner merger—both giants were touted as ‘synergies of the future’ yet struggled once capital markets cooled. The move extends two long arcs: ever-tighter vertical integration (from Carnegie’s 19th-century steel to today’s rockets-internet-AI stack) and the recurring use of equity valuations to paper over cash burn during technology booms (railroads in the 1870s, dot-coms in 1999, now generative AI). If successful, a trillion-dollar IPO could reopen moribund public markets and bankroll orbital data centers, nudging computing literally off-planet; if not, it may stand as a cautionary tale of empire-building at the frothiest point of an AI bubble. On the century scale, the episode tests whether space becomes the next industrial platform or whether concentrated techno-conglomerates collapse under their own financial gravity.
Perspectives
Investor-friendly financial outlets
Finimize, Yahoo Finance, CityAM — Highlight the takeover as a once-in-a-generation deal that could reopen the IPO window and create the world’s most valuable private company, stressing trillion-dollar valuations and massive upside for public-market investors. Their upbeat framing leans on eye-catching numbers and future IPO hype that keep retail readers excited but glosses over technical, regulatory and capital-intensity risks that could erode those lofty valuations.
Skeptical business publications
Economic Times, Businessday NG — Cast the merger as a financial rescue that shifts xAI’s heavy debt, billion-dollar monthly burn and regulatory headaches onto SpaceX, questioning who really benefits. By centering worst-case cash-burn figures and shareholder grumbling, they underscore Musk-related drama that attracts readership yet may understate the strategic logic or unique assets xAI brings to SpaceX.
Global financial wire services
Bloomberg Business — Present the deal as Musk’s plan to build a “vertically-integrated innovation engine,” mixing rockets, AI and space data-centers, while noting the scale of the IPO and satellite ambitions. The straight-news tone largely relays Musk’s own rationale and valuation figures, reflecting access journalism incentives that temper deep scrutiny of feasibility or antitrust concerns.