Key Points:
- Elon Musk is in advanced talks to merge SpaceX and xAI. The merger aims to support xAI’s $1 billion monthly cash burn.
- SpaceX recently requested permission to launch one million new satellites.
- SpaceX President Gwynne Shotwell may help run the combined entity.
- The merger comes as SpaceX eyes a potential $1.5 trillion IPO.
Elon Musk is reportedly close to merging his rocket company, SpaceX, with his artificial intelligence startup, xAI. According to insiders, the billionaire has already told investors about the plan, and a deal could be announced as early as this week. This potential merger highlights just how expensive the race for artificial intelligence has become.
Building advanced AI requires massive amounts of money. Reports indicate that xAI is burning through roughly $1 billion every single month. By combining the startup with SpaceX, Musk can pool resources and capital. SpaceX is currently valued at around $800 billion, while xAI raised funds at a $200 billion valuation last year. Bringing them together would create one of the largest private technology giants in the world.
There is also a practical reason for the combination beyond just money. Musk appears to be crystallizing a plan to put data centers into orbit. On Friday, SpaceX filed a request to launch as many as one million satellites. If the companies merge, SpaceX’s launch capabilities could directly support xAI’s need for computing power in space, bypassing power grid limitations on Earth.
The management structure of this new mega-company is also taking shape. Gwynne Shotwell, the longtime president of SpaceX who is widely credited with its operational success, may help run the combined empire. Meanwhile, Anthony Armstrong, a former Morgan Stanley executive who serves as CFO for xAI, is also a key figure in these financial maneuvers.
This isn’t the only deal Musk has considered. SpaceX is reportedly looking toward a massive initial public offering (IPO) that could value it at $1.5 trillion. There have even been discussions about tying these entities to Tesla.
For now, however, the focus is on saving the AI dream by attaching it to the financial rocket ship that is SpaceX. While talks are advanced, sources warn that the deal is not final and could still fall apart.
