Catenaa, Monday, February 02, 2026- Elon Musk is in advanced talks to combine SpaceX with xAI, as the cost of an AI-powered future is too great for any single entity to bear alone.
Musk’s rocket and satellite group and his artificial intelligence firm have informed some of their investors about the plans, Bloomberg reported.
They may announce an agreement as soon as this week, some of the people said. Talks are ongoing and may drag on longer or fall apart, the people said.
A deal would combine two of the largest, closely held companies in the world.xAI raised funds at a $200 billion valuation in September, while SpaceX was set to go ahead with a share sale in December at about an $800 billion valuation.
The central catalyst for a merger is AI’s insatiable need for capital. The rate at which xAI has been burning through cash, around $1 billion a month, has compelled Musk to blur corporate boundaries, pool capital further, and rethink whether his moonshots should stay separate.
Among those who may help Musk run a merged empire is Gwynne Shotwell, the longtime president and chief operating officer of SpaceX.
In October, Musk named Anthony Armstrong, a former Morgan Stanley executive, as chief financial officer of xAI.
Armstrong holds the same role for X and helped Musk complete his $44 billion acquisition of the social media platform, formerly known as Twitter.
In combining his cash-burning AI startup and the more mature SpaceX, Musk may also be crystallizing his vision for launching data centers into space.
SpaceX is requesting permission to put as many as one million satellites into the Earth’s orbit for the plan, according to a filing on Friday.
SpaceX, which is looking toward a potential IPO that could value it at about $1.5 trillion, has also discussed the feasibility of a tie-up with Tesla.
