ISTANBUL

US tech billionaire Elon Musk’s company SpaceX on Tuesday confirmed that it will merge with his AI venture xAI in a deal valued at $1.25 trillion, bringing more of Musk’s businesses under one roof as SpaceX reportedly moves toward an initial public offering later this year.

In a statement posted on SpaceX’s website, the firms said the combination would create a tightly linked technology powerhouse spanning AI, rockets, satellite internet, direct-to-phone connectivity, and a major real-time information and “free speech” social platform.

Under the transaction, SpaceX would take the ownership of xAI’s assets, including the Grok chatbot and the social media company X.

The move aligns with Musk’s push to support AI with massive computing infrastructure -- an effort he has framed as so power-hungry and costly that he wants to place data centers and solar-powered satellites in space.

Reports said the deal implied valuations of about $1 trillion for SpaceX and $250 billion for xAI, positioning the merged group for a public listing above $1 trillion.

The timing is expected to target early summer, tied, according to the report, to a planetary alignment around Musk’s birthday. Musk turns 55 on June 28, near when Jupiter and Venus are expected to appear close together.

The announcement highlighted space-based datacenters as a key justification, arguing that reliance on Earth-based facilities demands enormous electricity and cooling and that global AI power needs cannot be met on land without harming communities and the environment.

It added that, over the long term, scaling AI “obviously” requires space-based solutions.

The merger follows a broader pattern of Musk linking his companies via deals: xAI previously acquired X in an all-stock move in early 2025, and Tesla recently disclosed plans to invest $2 billion in xAI.

Both businesses have climbed sharply in valuation.

SpaceX has benefited from leading satellite launches and winning large US government contracts, and it reportedly told investors in December it expected an $800 billion valuation.

xAI’s value has also surged during the AI boom despite controversy around Grok chatbot, including allegations that it amplified racist content and the spread of nonconsensual sexualized deepfakes.

The company announced a $20 billion Series E raise last month that reportedly valued it at $230 billion.

Rumors about the merger intensified over recent days.

Musk appeared to hint at confirmation on Monday by replying “yes” to an X post referencing the reports.

The deal also shifts attention away from recent negative headlines for Musk, including a Tesla earnings update showing falling revenue and a weak car business, along with a US Department of Justice release of millions of files tied to late convicted sex offender Jeffrey Epstein that included friendly messages from Musk and plans to visit Epstein’s private island.

Musk has not answered questions about those emails, calling the release a “distraction” and saying he understood how the correspondence could be misconstrued and used against him.