-1.61% Elon Musk has announced the merger of SpaceX with his artificial intelligence start-up xAI, a strategic move aimed at paving the way for a major initial public offering. According to Bloomberg, the combined entity could reach a valuation of $1.25 trillion when it lists. Official filings submitted in Nevada say that the transaction was completed on February 2, with SpaceX now designated as the managing member of X.AI Holdings. The merger brings together activities spanning AI, aerospace, telecommunications via Starlink and social media through X (formerly Twitter). The integration marks the most ambitious tie-up ever carried out within Musk's industrial ecosystem. SpaceX, valued at $800bn in a 2025 secondary sale, and xAI, estimated at $230bn after a recent fundraising round, form a conglomerate geared toward "vertical” innovation, in Musk's words. Tesla recently announced a $2bn investment in xAI, further strengthening the links between the tech magnate's different companies. The new structure comes as xAI faces regulatory criticism. In 2023, Musk already integrated the social network X into xAI, whose tools have been implicated in the spread of AI-generated images that were illegal or produced without consent. The entity is now the subject of several investigations in Europe, India and the US. Founded in 2002, SpaceX remains a key player in the global space sector, backed by its NASA contracts and the development of the Starlink network. xAI, created in 2023, aims to compete directly with OpenAI, with which Musk has been engaged in a public dispute since his departure in 2018. © MarketScreener.com - 2026