SpaceX and xAI, both led by Elon Musk, are discussing a potential merger ahead of a possible SpaceX initial public offering later this year, according to Reuters. A merger would place products and platforms such as the Grok chatbot, the X social media platform, Starlink satellites, and SpaceX’s rockets under a single corporate structure.
Neither SpaceX nor xAI has publicly commented on the possibility of a merger. However, recent corporate filings show that two new entities — K2 Merger Sub Inc. and K2 Merger Sub 2 LLC — were formed in Nevada on January 21, a move that has fueled speculation about a potential corporate consolidation.
Bringing the two companies together could also support one of Musk’s long-term ambitions for xAI: placing data centres in space. Musk has previously suggested that hosting AI infrastructure off Earth could provide strategic advantages.
The reported talks align with Musk’s broader push to consolidate his businesses. Last year, SpaceX agreed to invest $2 billion in xAI, according to The Wall Street Journal. Earlier this week, Tesla, another Musk-led firm, disclosed that it had also invested $2 billion in the AI startup.
In 2025, xAI acquired X in a transaction that Musk said valued xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, has continued to climb in valuation as well. The company reportedly completed a secondary share sale that valued it at $800 billion, making it the most valuable private company in the United States.
A recent Financial Times report suggested that Musk is targeting a SpaceX IPO in June. Still, Musk’s ambitious timelines have often shifted in the past, leaving the exact timing of any public offering uncertain.
