Technology & Science
SpaceX Absorbs xAI Ahead of $50 B IPO, Creating $1.25 Trillion Musk Conglomerate
On 2 Feb 2026, Elon Musk folded his cash-hungry AI startup xAI into SpaceX via an all-stock deal, welding the two private giants into a single entity valued at roughly $1.25 trillion before a planned public listing later this year.
Focusing Facts
- Four days before the announcement, SpaceX filed with the FCC to launch up to 1 million satellites to host orbital data-center nodes for xAI’s models.
- Internal budgets show xAI burning about $1 billion per month after a January raise that pegged it at a $230 billion standalone valuation.
- IPO bankers have circulated a preliminary price of $526.59 per share that would raise as much as $50 billion for the merged firm.
Context
Musk’s move echoes the 1901 creation of U.S. Steel—when J.P. Morgan fused disparate mills into a $1 billion behemoth—by using capital markets to bankroll technology too expensive for standalone entities. Like the 1990s Iridium satellite project, it bets that space-based infrastructure can create a new telecom/computing layer; unlike Iridium, Starlink already generates cash, tilting the risk calculus. The tie-up embodies two long arcs: (1) relentless vertical integration of critical tech stacks (from oil in the 1880s to cloud+chips today) and (2) the shift from state-funded space activity to billionaire-backed conglomerates. Over a 100-year horizon this could matter if orbital computing becomes as foundational as terrestrial fiber, but it could also fizzle—governance opacity, regulatory pushback, and the physics of launching a million satellites remain giant unknowns. Whether history sees this as the birth of the first space-AI utility or another overleveraged empire will hinge on execution and on society’s tolerance for quasi-private control of both orbital lanes and information pipelines.
Perspectives
Mainstream business press
e.g., Bloomberg Business — Frame the SpaceX–xAI merger as a strategic pooling of capital that will speed Musk’s IPO plans and create a $1.25 trillion powerhouse spanning rockets, AI and satellite internet. Coverage aimed at investors foregrounds eye-catching valuations and growth upside while soft-pedalling governance problems or the fact that xAI’s benefit to SpaceX is still ‘unclear’.
Wall Street analysts and investor sceptics
quoted in Bloomberg — Warn that folding cash-hungry xAI into profitable SpaceX injects uncertainty and could erode the value of outside stakeholders such as EchoStar, calling xAI a ‘market laggard’. Analysts may accentuate downside risk to appear prudent and protect clients, leaning on limited public data and potentially underestimating synergies Musk could realise.
Technology & general-interest outlets
Ars Technica, BBC, CNBC — Highlight Musk’s grand vision—using SpaceX’s launch capacity to build a one-million-satellite AI constellation—portraying the deal as the next dramatic step in extending ‘consciousness to the stars’. Stories play up the spectacle and visionary narrative to captivate readers, giving less space to boring financials or the regulatory probes and technical hurdles that could derail the plan.