Merger Talks Between SpaceX and xAI Progress Toward Agreement

TLDR

• Elon Musk is holding advanced talks to merge SpaceX with his artificial intelligence company xAI.
• Both companies have informed some investors about the possible merger being discussed privately.
• The deal could be finalized and announced as early as this week depending on the outcome of talks.
• Bloomberg News reported the merger discussions and cited sources familiar with the matter.
• SpaceX is currently valued at around 800 billion dollars according to recent investor estimates.

SpaceX and xAI are progressing toward a potential merger that could be finalized soon, according to individuals familiar with the matter. The companies, both under Elon Musk’s control, have reportedly informed investors about the proposed combination, though discussions remain active. If completed, the agreement would bring together two of the world’s highest-valued private firms.

SpaceX and xAI Advance Merger Talks

Elon Musk is moving forward with plans to unite SpaceX and xAI, two companies he currently oversees. Bloomberg News reported that both companies discussed the merger with some investors and are now in advanced stages of the process. The sources requested anonymity because the details remain private.

The discussions could result in a formal announcement this week, though there is no finalized agreement yet. However, two Nevada business entities were registered on January 21, 2026, possibly in preparation. Representatives for both companies declined to comment on the ongoing discussions.

The merger would combine SpaceX’s global satellite and launch operations with xAI’s artificial intelligence model development and computing capabilities. This collaboration aligns with Musk’s ambitions to build a shared infrastructure across his companies. “This is a powerful combination of AI and space,” one investor reportedly told Bloomberg.

If the deal proceeds, SpaceX could provide the backbone for future AI computing in orbit through its expanding satellite network. The company is seeking regulatory approval to deploy up to one million satellites as part of its broader long-term plans. These satellites could support large-scale AI models operated by xAI in space.

SpaceX had a private market valuation of around $800 billion in 2025 and has been preparing for a public offering. Sources indicated that the IPO could value the company at up to $1.5 trillion, though no timeline is confirmed. The merger could streamline operations ahead of any public market debut.

xAI, launched by Musk in 2023, has quickly gained investor support and achieved a valuation near $230 billion by late 2025. It has focused on developing competitive language models and advanced AI infrastructure. The potential merger would give xAI access to low-latency, space-based computing through SpaceX.

Musk Pursues Strategic Consolidation Before IPO

Musk previously orchestrated similar mergers, including Tesla’s purchase of SolarCity in 2016 and xAI’s acquisition of X in 2025. These actions reflect a consistent strategy of combining Musk-led ventures to consolidate operations. Investors are being informed of the current merger plans under that same framework.

Bloomberg’s sources indicated the companies aim to complete the deal before SpaceX begins any IPO-related proceedings. The merger could simplify Musk’s ownership structure across his various companies. This would allow a more unified approach to deploying next-generation AI systems with global infrastructure.

Though the merger is not finalized, preparations suggest it is a priority for Musk and his executive teams. Musk posted positively on X in response to reports, indicating approval of the merger news. No formal regulatory filings have been made public at this time.

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