Elon confirms he’s in talks to merge xAI with SpaceX due to massive AI costs

Elon Musk just confirmed it himself. The rumors are real. He’s working on combining xAI and SpaceX, and it could be made official any day now.

Word already got out to some investors in both companies. The deal isn’t signed yet, but it’s far enough along that Elon replied “Yes” when someone posted about it on X.

Musk looks to merge xAI’s cash drain with SpaceX’s capital strength

xAI pulled in funds back in September at a $200 billion valuation. A few months later, SpaceX was lined up for a share sale at around $800 billion. These are two of the biggest private companies in the world, and now Elon wants to make them one.

It’s not the first time he’s blurred the lines between companies. After taking over Twitter in 2022, Elon rebranded it to X, then borrowed engineers from both Tesla and SpaceX to keep it running. Not long after, he folded xAI into X. He doesn’t care about clean walls between businesses. He cares about who can get the job done.

This new merger would be bigger than anything he’s done before. And it’s not just about money. Elon’s got plans to put one million satellites in Earth’s orbit, and he wants those satellites to power AI data centers in space. That’s not a joke. SpaceX already filed for it on Friday.

Shotwell and Armstrong expected to help run merged structure

Elon’s got people lined up to help if the merger gets approved. Gwynne Shotwell, who’s been running the day-to-day at SpaceX for years, is expected to play a key role.

She’s been with him through every launch and already knows how to handle the insane scale of these projects.

Then there’s Anthony Armstrong, who was named CFO of xAI back in October. Armstrong used to be at Morgan Stanley, and he already helped Elon close the $44 billion deal for Twitter. He’s also CFO of X, so he’s used to dealing with this tangled web of companies.

If this deal closes, it would give Elon a tighter grip on the tech he needs for future launches. He’s trying to push Starship, the massive rocket, into full production.

That rocket is critical for missions booked by the US Space Force, the Golden Dome missile defense, and the Artemis moon project.

Even as this is going on, SpaceX is preparing to go public, with the IPO possibly putting its value at around $1.5 trillion. There’s also talk about whether Tesla might get pulled in somehow, but nothing official has come out on that.

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