Musk's SpaceX and xAI merge to make world's most valuable private company

"Elon Musk's SpaceX is taking over his artificial intelligence (AI) start-up, as the billionaire continues to unify some of his many business interests. SpaceX confirmed the deal to acquire xAI, a smaller firm known for its Grok chatbot, posting a memo from Musk about the merger on its website. Terms of the deal were not disclosed. However, a source familiar said it valued xAI at $125bn (91bn) and SpaceX at $1tn, making it the most valuable private company ever."

"xAI began as a segment of X, formerly known as Twitter, after Musk acquired the social media platform in 2022, using its access to real-time text and information as AI training data. By spring of 2025, it was independently incorporated and valued more highly by investors than X. In recent weeks, the European Commission and UK watchdog Ofcom both launched investigations into X over concerns Grok was used to create sexualised images. xAI said in January it had imposed restrictions on Grok users that limit image editing."

"Emma Wall, chief investment strategist at Hargreaves Lansdown, said Musk was the market leader in the "two incredibly frontier technologies" of AI and space exploration. She said because the new merger is entirely private, it hasn't been tested by the market in the same way as Tesla, which is publicly listed. "But what you're seeing priced in at these valuations is a kind of multi-decade vision for the company to put... energy and energy generation into space, data centres into space," she told BBC Radio 4's Today programme. However, Wall said any potential benefits would not be seen on earth for "10, 20, 30 years"."

SpaceX acquired xAI, the developer of the Grok chatbot, and posted a memo from Musk about the merger. A source said the deal valued xAI at $125bn and SpaceX at $1tn, creating the most valuable private company on record. xAI started within X after Musk's 2022 acquisition of Twitter and used real-time platform data for AI training before incorporating independently by spring 2025. Regulators in the EU and UK opened probes over Grok's alleged use in creating sexualised images. xAI said it limited image editing, and Tesla invested $2bn in xAI last month.

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