February 2, 2026 – Elon Musk is nearing a massive merger between SpaceX and xAI in a deal valued at $1.25 trillion, according to Bloomberg. The move includes plans for space-based data centers and could lead to an early SpaceX IPO. Here's a full breakdown of the latest reports.

Elon Musk Plans to Merge SpaceX and xAI in $1.25 Trillion Deal

Elon Musk is close to merging SpaceX and xAI in a landmark $1.25 trillion deal. The merger aims to combine SpaceX’s space infrastructure with xAI’s AI capabilities, including plans for massive data centers in space. Bloomberg reports the deal could accelerate a SpaceX IPO.

Key Details of the Merger

• Valuation: $1.25 trillion combined entity.
• Goal: Build large-scale data centers in space using Starship and Starlink.
• Timeline: Deal nearing completion; early SpaceX IPO possible (originally planned for June).
• Structure: Musk would retain control, with xAI integrated into SpaceX’s ecosystem.

Why Merge SpaceX and xAI?

Musk’s vision: Combine SpaceX’s orbital infrastructure (Starlink, Starship) with xAI’s AI models for unprecedented compute power in space. Benefits include:

• Unlimited energy from solar in space.
• Low-latency data transfer via Starlink.
• Reduced reliance on Earth-based data centers.
• Accelerated AI training for Grok and future models.

What It Means for AI, Space, and Investors

• AI: Massive compute scale in space could leapfrog competitors.
• Space: Starship becomes key for data center deployment.
• Investors: Early SpaceX IPO could be historic; xAI valuation boosted.
• Risks: Regulatory hurdles, technical challenges, high capital needs.

Reliability of the Reports

High credibility (9/10): Bloomberg exclusive report with insider sources. Followed by TechCrunch, CNBC, and Yahoo Finance. Musk has not denied the merger, adding weight.

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