In a move underscoring Elon Musk’s ongoing efforts to consolidate his diverse business ventures, SpaceX is set to acquire his artificial intelligence (AI) startup, xAI.
SpaceX officially confirmed the acquisition of xAI, the firm behind the Grok chatbot, on Monday, releasing a memo from Musk detailing the merger on its website.
Musk stated in the memo that the merger aims to create an “innovation engine” by integrating AI, rocket technology, space-based internet services, and media operations.
The financial terms of the deal remain undisclosed. Last month, Tesla, Musk’s electric vehicle company, announced a $2 billion investment in xAI.
Musk told Tesla investors that he envisions xAI playing the role of an “orchestra conductor” for Tesla factories, utilizing autonomous robots.
Simultaneously, Musk revealed Tesla’s decision to discontinue production of two car models, shifting focus towards robotics—a significant strategic pivot for the company.
Tesla proceeded with the xAI investment despite objections from some shareholders who questioned the allocation of resources to another Musk-owned entity. A shareholder vote last year showed more abstentions and opposing votes than approvals.
SpaceX is also reportedly exploring plans to go public with an initial stock offering.
xAI initially emerged as a segment of X, formerly known as Twitter, following Musk’s acquisition of the social media platform in 2022, leveraging its access to real-time data for AI training purposes.
By the spring of 2025, xAI had become an independently incorporated entity, boasting a higher valuation among investors than X. The AI company acquired the social media platform in an all-stock transaction, with Musk stating the merger would “combine the data, models, compute, distribution, and talent.”
xAI’s flagship product, Grok, has faced scrutiny over its AI image generation capabilities.
Recently, the European Commission and the UK’s Ofcom launched investigations into X over concerns that Grok was used to create sexualized images.
xAI stated in January that it had implemented restrictions on Grok users to limit image editing.
In the SpaceX memo announcing the xAI merger, Musk suggested that space could provide a solution to the energy needs of AI firms.
“In the long term, space-based AI is obviously the only way to scale,” he wrote.
He stated that launching AI satellites from Earth would be the “immediate focus,” but added that the deal would also help advance his broader ambitions.
“The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe,” he wrote.
The first crewed Moon mission in 50 years could launch in February, ahead of a future lunar landing.
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