Elon Musk, the notorious entrepreneur behind SpaceX, Tesla—and most recently—xAI, was in the news again recently. He made quite the splash when he went viral for his performance at CPAC up in Maryland. Wearing sunglasses and a MAGA hat, Musk was immediately provocative with his eye-catching new aesthetic. He dazzled crowds worldwide with his audacious promise to combine artificial intelligence with humanity’s leap into space.
Musk’s new grouper approach goes beyond bundling services together to cut costs and opening them up to new uses. Half of his most impactful moves are seen in a reported $2 billion investment from SpaceX to xAI. Tesla joined in on the fun with a similar investment. This consolidation provides the groundwork for a merger — friendly or otherwise — between the two companies. From geoengineering to observability, they are already prioritizing their aims for space-based applications of artificial intelligence.
Both The Wall Street Journal and Reuters have since covered the speculation that a merger between SpaceX and xAI is in long-term discussions. This news comes amid rapid advances at both companies as they approach SpaceX’s expected IPO later this year. Musk reportedly has ambitious plans for xAI’s data centers to be located in space. He thinks this will be especially useful for improving AI computation capabilities with a focus on space exploration.
In a somewhat unexpected, but very strategic move, xAI acquired X just recently. This agreement pegged xAI’s value at roughly $80 billion, and X’s at roughly $33 billion. The acquisition reflects Musk’s intention to create a robust framework for AI technologies that will support his overarching goals across his ventures, including Tesla’s renewed focus on Dojo3, which Musk stated will be essential for space-based AI computing.
On January 21, Nevada became home to two brand new corporate creations—K2 Merger Sub Inc. and K2 Merger Sub 2 LLC. These exciting agencies were born, in part, to push the envelope on progressive policies. This move further illustrates how serious the merger talks are, and the type of ecosystem that Musk wants to create in relation to how his companies operate.
Make no mistake—Musk has grand designs for all his ventures. According to some industry watchdogs, they frequently run into material delays and challenges with rolling out that execution. This history is important context when considering the ambitious timelines for the proposed merger and the daunting projects tethered to it.