SpaceX acquires xAI for $250 billion to launch AI into space

Elon Musk's AI ambitions

In one of the largest and most strategically significant mergers and acquisitions in history, SpaceX acquired xAI – Elon Musk's artificial intelligence company – in an all-stock deal worth $250 billion, according to a joint announcement from both companies late on February 2, 2026 (Pacific Time).

This deal transforms xAI into a wholly owned subsidiary of SpaceX and gives xAI shareholders (primarily Musk himself, original employees, and a small group of institutional investors) a stake in the larger SpaceX entity. The agreement values ​​SpaceX at approximately $1.35–$1.4 trillion post-transaction (pre-transaction valuation was around $1.1 trillion), further solidifying its position as the world's most valuable private company.

The strategic logic behind the valuation.

The scale of the deal reflects the expectation that xAI is not simply an independent AI lab, but a technology platform capable of creating added value across multiple sectors. Unlike consumer-oriented AI products, xAI's models can be integrated into critical systems, where small benefits can translate into massive economic returns.

By placing xAI within SpaceX, Musk has anchored AI development to deployment in the physical world, in contrast to cloud-only or consumer-centric AI strategies.

This deal intensifies competition among leading companies in the AI ​​field. While rivals focus on enterprise software, search, or consumer assistants, SpaceX-xAI targets AI designed for harsh environments—space, defense, logistics, and infrastructure.

It also raises the bar for capital requirements in advanced AI development. The $250 billion valuation underscores that advanced AI is now a race demanding significant capital and infrastructure, not just a software competition.

Assessment and Conclusion

SpaceX's $250 billion acquisition of xAI is more than just a deal – it's a statement of intent. Elon Musk is no longer running two separate companies; he's merging them into a single entity capable of simultaneously advancing the superintelligence of AI and multi-planetary civilizations. For investors, this creates the most valuable private company in history (approximately $1.35–$1.4 trillion) with unprecedented synergistic advantages: the world's largest GPU cluster designing the next-generation rockets that will take the company to Mars. For the broader technology ecosystem, this signals that AI and space are converging faster than most people predicted.

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Compiled and analyzed by HCCVenture

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