SpaceX merges with xAI, reportedly will seek an IPO valuation of $1.25 trillion
Elon Musk says his space company has merged with his AI company, with the lofty goal of eventually putting data centers in space.
Elon Musk’s giant space company has merged with his AI company, according to a letter from Musk posted on the SpaceX website.
As part of the reasoning for the deal, Musk cited a pet idea among tech billionaires: powering AI by placing data centers in space.
“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.
In the long term, space-based AI is obviously the only way to scale...
By directly harnessing near-constant solar power with little operating or maintenance costs, these satellites will transform our ability to scale compute.”
(This concept, by the way, would be exceptionally hard to pull off.)
After the tie-up, the combined company is aiming to go public at a valuation of about $1.25 trillion, according to Bloomberg, which first reported the merger was happening, citing an internal memo.
Tesla, which Bloomberg had previously reported to have been in consideration to be merged among the companies in some way, wasn’t mentioned in the report of the deal. Shares were roughly flat after-hours.
The move would tie together two of Musk’s signature companies — two of the biggest privately held firms in the world. It would also bundle together rockets, satellites, the social media site X, and artificial intelligence all under one company.
An IPO at a valuation of $1.25 trillion would immediately place the combined SpaceX/xAI into the top 10 most valuable publicly traded companies on US exchanges. It would be one of the biggest global IPOs ever by valuation. (The largest IPO on record is Saudi Aramco, which went public in Saudi Arabia valued at about $1.9 trillion in 2019.)
Various reports had said SpaceX was seeking a valuation topping $1 trillion, and some had even floated a valuation exceeding $1.5 trillion.
Musk’s companies are already extremely interconnected, including Tesla’s recent $2 billion investment in xAI.
