SpaceX, xAI eye $1.25T merger to fuse AI with Starlink infrastructure

Musk’s SpaceX and xAI are exploring a $1.25T merger to fuse Starlink’s satellite network with advanced AI, creating space-based data and compute infrastructure.

SpaceX and artificial intelligence startup xAI are engaged in early merger discussions that could result in a combined valuation of $1.25 trillion, Bloomberg News reported today.

The potential transaction would consolidate space infrastructure and artificial intelligence operations under a single corporate entity, both controlled by entrepreneur Elon Musk.

SpaceX, valued at approximately $180 billion in 2025, operates the Starlink satellite broadband network comprising over 5,000 satellites. The company provides launch services to NASA, the Pentagon, and commercial customers.

xAI, established in 2023, develops advanced language models designed to compete with OpenAI’s GPT and Google’s Gemini platforms. The proposed merger could enable synergies across space-based computing, edge AI deployment, and satellite-driven data analysis, according to the report.

Industry analysts have indicated that integrating SpaceX’s global satellite network with xAI’s artificial intelligence capabilities could enable applications in defense, communications, and autonomous technology sectors.

A $1.25 trillion valuation would position the merged company among the world’s most valuable private enterprises, reflecting investor expectations for growth in AI applications utilizing Starlink’s infrastructure.

The transaction faces several challenges, according to observers. SpaceX maintains a large and diverse investor base, while xAI remains closely held by Musk. Aligning shareholder interests will require negotiation between the parties.

Regulatory review is anticipated given the transaction’s scope across artificial intelligence, telecommunications, and aerospace sectors.

Technology experts have noted potential benefits including reduced AI inference latency and expanded access to data-rich environments. Execution risks remain substantial when combining two complex technology operations, analysts said.

Musk, who leads both companies, is expected to maintain control following any merger. Market participants are monitoring for formal regulatory filings.

If completed, the transaction could significantly alter the competitive landscape at the intersection of artificial intelligence, space technology, and digital infrastructure in coming years.