SpaceX is exploring a potential merger with Elon Musk’s artificial intelligence company xAI, a move that could dramatically reshape the future of space, AI, and national security while accelerating Musk’s long-term vision of placing data centers in orbit. The deal would involve swapping xAI stock for SpaceX shares and could be finalized ahead of a blockbuster SpaceX public offering expected later this year.
The proposed merger would consolidate Musk’s most powerful ventures under one roof, combining SpaceX’s rockets and Starlink satellite network with xAI’s Grok chatbot and the X social media platform. Regulatory filings show two new Nevada entities were quietly formed on January 21 to facilitate a possible transaction, one listing SpaceX and CFO Bret Johnsen as managing members. xAI executives may be offered cash instead of SpaceX equity.
At the same time, Bloomberg reports that SpaceX is also considering a potential merger with Tesla, fueling speculation that Musk may ultimately consolidate his empire into a single vertically integrated powerhouse spanning space launch, AI, autonomous vehicles, communications, and defense.
The strategic logic extends well beyond Wall Street. Folding xAI into SpaceX would accelerate efforts to deploy space based AI data centers powered by solar energy, a concept Musk recently described as the lowest cost long term solution for training and running artificial intelligence models.
The merger could also significantly enhance SpaceX’s position within the U.S. defense ecosystem. xAI already holds a Pentagon contract worth up to $200 million, and Defense Secretary Pete Hegseth recently confirmed that Grok will be integrated into military networks as part of an AI acceleration strategy. Starlink and its classified Starshield variant already rely heavily on AI for satellite maneuvering and surveillance, making deeper integration a natural next step.
If completed, the SpaceX xAI merger would mark the latest in a series of Musk consolidations, following Tesla’s acquisition of SolarCity and last year’s folding of X into xAI.
