• The merger values the combined entity at approximately $1.25 trillion, with SpaceX valued between $859 billion and $1.26 trillion and xAI at $219 billion to $294 billion.
  • An exchange ratio of 0.1433 xAI shares per SpaceX share prices xAI at $75.46 and SpaceX at $526.59 per share, as reported by CNBC's Faber and confirmed in recent Bloomberg coverage on February 3, 2026.
  • Advanced talks progressed over the February 2-3 weekend, with a potential announcement as soon as this week, though details like share transfers remain unclear; SpaceX plans an IPO later in 2026 post-merger.

Elon Musk is combining SpaceX and xAI in a blockbuster merger that would create a tech behemoth valued at around $1.25 trillion, according to people familiar with the matter. The deal, which could be unveiled imminently, aims to consolidate Musk's sprawling empire to fuel ambitious AI and space investments amid rising compute and data center costs.

Valuation specifics have started to trickle out, with SpaceX pegged between $859 billion and $1.26 trillion and xAI at $219 billion to $294 billion. The exchange ratio of 0.1433 xAI shares per SpaceX share effectively prices xAI at $75.46 and SpaceX at $526.59 per share. These figures, reported by CNBC's Faber and corroborated by Bloomberg over the weekend, highlight the staggering scale of the transaction, which would rank among the largest private mergers in history.

Negotiations intensified in recent days, with sources indicating that advanced talks over the February 2-3 weekend have brought the parties closer to a final agreement. An announcement could come as early as this week, though some logistical hurdles, such as the mechanics of share transfers, are still being ironed out. If completed, the merger would set the stage for a highly anticipated SpaceX IPO later in 2026, potentially offering public market investors their first direct exposure to the combined AI-space ecosystem.

Musk, who leads both companies, has been pushing for this consolidation to achieve synergies between SpaceX's aerospace capabilities—like its reusable Falcon and Starship rockets and Starlink satellite internet—and xAI's advanced AI models, such as Grok, which are focused on scientific discovery. The move comes as xAI faces mounting compute costs, while SpaceX benefits from lucrative NASA contracts and Starlink's rapid growth. One insider described the merger as a strategic play to "bail out" xAI's expensive ambitions by leveraging SpaceX's massive scale and cash flow.

Regulatory approvals loom as a primary challenge, with U.S. and European authorities expected to scrutinize the deal closely. Filings are nearing completion, and the companies are emphasizing potential benefits to customers and employees, such as enabling futuristic projects like orbital data centers. In a brief statement, a spokesperson for Musk's office said, "We're focused on building a sustainable future through innovation," but declined to comment further on the merger terms.

Market watchers are already weighing in on the implications. Cathie Wood's ARKVX fund, which holds stakes in both SpaceX and xAI, values the combined entity at up to $1.5 trillion, citing the convergence of AI and space tech as a game-changer. Meanwhile, broader tech stocks, like Palantir, have seen gains on strong revenue forecasts, reflecting investor appetite for AI-driven growth stories.

As the clock ticks down to a possible announcement, stakeholders from Silicon Valley to Wall Street are bracing for what could be a defining moment in Musk's career. The merger not only reshapes the landscape for private mega-deals but also sets the foundation for a global leader in next-generation technology, with long-term visions that stretch from Earth-bound data centers to the stars.

Correction: An earlier version of this article misstated the exchange ratio; it has been updated to reflect the correct figure of 0.1433 xAI shares per SpaceX share.