SpaceX and xAI are moving closer to a potential merger that could unite two of the world’s most valuable private companies, according to people familiar with the discussions. The talks, first reported by Bloomberg, have been shared with select investors, though negotiations remain ongoing and no final agreement has been signed. If completed, the deal would bring together SpaceX, the dominant force in commercial space launch and satellite communications, with xAI, the artificial intelligence firm founded by Elon Musk in 2023. The sources requested anonymity because the talks are private. People familiar with the matter said a formal announcement could come as early as this week, although they cautioned that the discussions are still active and could change. Adding to speculation, two Nevada business entities were registered on Jan. 21, 2026, a move some observers interpret as preparatory groundwork for a corporate transaction. A Merger of Space and Artificial Intelligence The proposed combination would integrate SpaceX’s satellite and launch infrastructure with xAI’s rapidly growing AI model development and computing operations. Investors briefed on the talks described the merger as consistent with Musk’s broader vision of building shared infrastructure across his companies, creating synergies between space-based assets and next-generation artificial intelligence. “This is a powerful combination of AI and space,” one investor told Bloomberg, characterizing the discussions as ambitious but strategically coherent. SpaceX’s expanding satellite network, anchored by its Starlink constellation, could serve as a platform for future AI computing in orbit. The company is seeking regulatory approval to deploy up to one million satellites over the long term, a scale that would dramatically expand its global footprint. In theory, those satellites could one day support distributed, low-latency AI workloads operated by xAI, enabling real-time processing far beyond terrestrial data centers. Valuations and IPO Considerations SpaceX was valued at roughly $800 billion in private markets in 2025, making it one of the most valuable privately held companies in history. Sources have previously indicated that a future initial public offering could value the company at as much as $1.5 trillion, though no timeline for an IPO has been confirmed. Bettors on the decentralized prediction market platform Polymarket have placed the highest odds of 73% that SpaceX’s IPO will close at a market cap of more than $1 trillion. Contract asking what SpaceX’s IPO closing price will be (Source: Polymarket) The merger discussions are reportedly taking place ahead of any IPO-related preparations. By consolidating xAI into SpaceX before a public listing, Musk could streamline corporate structures and present investors with a more unified long-term strategy centered on global infrastructure and AI deployment. xAI, meanwhile, has seen its valuation climb rapidly. Launched less than three years ago, the company attracted significant investor backing and reached an estimated valuation of around $230 billion. The company has focused on developing large language models and building specialized computing infrastructure to compete with established AI players. A merger would give xAI direct access to SpaceX’s launch capabilities and satellite network, potentially reshaping how AI systems are trained and deployed.
