JAKARTA - Elon Musk is again making the market shake its head. SpaceX officially acquired its own artificial intelligence company, xAI, in a giant transaction that unites Musk's ambitions in the space and AI sectors in one super entity.
The deal combines SpaceX's rocket and satellite company with chatbot developer Grok, xAI, in one of the most ambitious corporate actions ever seen in the global tech sector. The acquisition was first reported by Reuters last week and is now confirmed directly by Musk.
"This is not just the next chapter, but the next book of the SpaceX and xAI mission: evolving to create a sun-conscious that understands the universe and expands the light of consciousness to the stars," Musk said in a statement.
A source familiar with the transaction said the deal valued SpaceX at $1 trillion, while xAI was valued at $250 billion. xAI investors will receive 0.1433 SpaceX shares for every xAI share they own. A number of xAI executives were also given the option of receiving a cash payment of $75.46 per SpaceX share.
With this value, this transaction broke the record as the largest merger and acquisition in the history of the world. The previous record lasted for more than 25 years, since Vodafone acquired Germany's Mannesmann for 203 billion US dollars in 2000, according to LSEG data.
This move is considered to strengthen SpaceX's position in the global AI race, amid fierce competition from major players such as Alphabet's Google, Meta, Amazon-backed Anthropic, to OpenAI. In addition, integration with xAI has the potential to support SpaceX's ambition to build large-scale data centers, given that AI is highly dependent on chips, energy, and computing infrastructure.
Another source said the combined SpaceX and xAI company is expected to set a share price of around $527 per share. Previously, SpaceX had the status of the world's most valuable private company, with a final valuation of around $800 billion in internal share sales. Meanwhile, xAI was last valued at $230 billion in November, according to the Wall Street Journal.
The merger comes as SpaceX prepares to go public via an initial public offering or IPO this year, which is said to push the company's valuation above $1.5 trillion.
This acquisition further consolidates Musk's business empire into a unified ecosystem that some investors have dubbed "Muskonomy". This ecosystem includes Tesla, Neuralink, to The Boring Company, and is now increasingly intertwined through the integration of technology, data, and human resources.
Musk is not new to merging his companies. Last year, he merged the X social media platform into xAI through a stock swap scheme, giving xAI access to data and global distribution. In 2016, Musk also used Tesla shares to acquire SolarCity, his solar energy company.
Despite being ambitious, this deal has the potential to invite close scrutiny from regulators. Governance issues, valuations, and conflicts of interest are in the spotlight, given that Musk holds leadership roles in the various entities involved. In addition, the movement of engineers, proprietary technology, and inter-company contracts can be a serious concern.
SpaceX itself holds multibillion-dollar contracts with NASA, the US Department of Defense, and intelligence agencies, all of which have the authority to review merger and acquisition transactions on the basis of national security and strategic interests.
If simplified, this is not just an acquisition. It is Musk uniting the brain and rocket in one corporate body. And as usual, the world is forced to watch.
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