SpaceX Finalizes $1.25 Trillion xAI Acquisition to Launch Orbital Data Center Network

On February 2, 2026, SpaceX reached a historic milestone by finalizing its acquisition of the artificial intelligence startup xAI. This merger has birthed a corporate titan with an estimated market capitalization of $1.25 trillion. Announced via SpaceX’s official channels, the deal creates a vertically integrated powerhouse that synthesizes rocket manufacturing, Starlink’s satellite internet, Starshield’s defense capabilities, the X social media platform, and the Grok AI chatbot. Elon Musk emphasized that the primary objective is to establish massive, solar-powered data centers in orbit. This shift is driven by the realization that terrestrial power grids are increasingly unable to sustainably support the massive energy requirements of training next-generation AI models.

To facilitate this ambitious space-based computational network, SpaceX has already submitted a formal request to the Federal Communications Commission (FCC) to deploy a constellation of up to one million satellites. The financial foundations of this merger are equally staggering: xAI was valued at $230 billion following its most recent funding round, while SpaceX reached an $800 billion valuation after a secondary stock sale late last year. Looking ahead, the consolidated entity is preparing for an initial public offering (IPO) in 2026. Wall Street analysts suggest this IPO could raise as much as $50 billion, with share prices expected to hover around $527.

Bret Johnsen, the Chief Financial Officer of SpaceX, clarified to a group of approximately 100 investors that this acquisition would not disrupt the timeline for the anticipated IPO, which is slated for the summer or autumn of 2026. Interestingly, while Tesla invested $2 billion into xAI just last month, the automaker did not enter the merger directly; instead, it maintains an indirect stake in the new corporate structure. Musk’s strategic pivot to orbital computing is based on his forecast that space-based processing will become the most cost-effective method for AI generation within the next two to three years. This plan relies heavily on the Starship launch system’s ability to provide the necessary payload capacity for deploying heavy hardware.

However, the newly formed entity is navigating significant legal turbulence in Europe. On Tuesday, February 3, 2026, investigators from the Paris Prosecutor's Office, supported by Europol and the National Gendarmerie’s cyber unit, conducted a raid on X’s headquarters in Paris. This action stems from a probe launched in January 2025 following a complaint by National Assembly member Eric Bothorel regarding algorithmic bias. The investigation has since expanded to include allegations of complicity in the distribution of child pornography and the role of the Grok chatbot in spreading Holocaust denial and sexually explicit deepfakes. Consequently, French authorities have requested "voluntary interviews" with Elon Musk and former X CEO Linda Yaccarino, scheduled for April 20, 2026.

While SpaceX moves forward, it is not alone in the race for orbital infrastructure; Jeff Bezos’s Blue Origin and Google’s Project Suncatcher are also investigating solar-powered orbital data centers. Nevertheless, the deep integration with Starlink and Starshield provides the merged company with a distinct logistical and informational edge over its rivals. The ultimate success of this vertical integration—bridging the gap between aerospace engineering and generative AI—remains contingent on Starship’s ability to deliver the massive throughput required to build out a functional orbital computing platform.