The World’s Most Valuable Private Company
It started with a memo.
Elon Musk, in his characteristically terse fashion, confirmed on February 2, 2026, that SpaceX had officially acquired his AI company, xAI. A transaction of a few words but with vast implications. The numbers speak clearly. SpaceX was internally valued at around $1 trillion as of December 2025, following a secondary share sale. xAI, barely a year old, closed a $20 billion Series E round in January 2026, bringing its valuation to between $230 billion and $250 billion. Combined, the entity is now valued at $1.25 trillion, as reported by Bloomberg and Reuters, surpassing ByteDance to become the most valuable private company globally.
The announcement, posted on the SpaceX website, was paired with Musk’s statement calling the union “the most ambitious, vertically integrated innovation engine on (and off) Earth.”
A Merger Beyond Business
At first glance, the pairing might seem unconventional—rockets and neural networks. But the logic driving this decision becomes clearer when viewed through Musk’s broader goals. SpaceX provides the launch infrastructure and satellite network. xAI brings the artificial intelligence capabilities. Starlink, another Musk-led project, covers the connectivity. And together, they can power and deliver AI far beyond Earth’s limitations.
Importantly, in early 2025, xAI officially folded the social media platform X (formerly Twitter) into its corporate structure. That means this newly merged entity now owns the platform’s real-time social data—a training ground for Grok, xAI’s large language model.
Musk believes that Earth-bound computing infrastructure will not be sufficient for the future of artificial intelligence. In the internal memo, he outlined how solar-powered orbital data centers could reduce the cost and energy demands of AI development. He highlighted “radiative cooling” and “unfiltered solar irradiance” as key technical enablers. Musk also explicitly linked this ambition to building a “Kardashev II-level civilisation”—a reference to a theoretical stage where humanity harnesses the full energy of its star.
SpaceX has filed with the FCC for a constellation of up to 1 million satellites designed for AI compute workloads, marking a significant departure from conventional terrestrial server farms.
Space as a Compute Frontier
This merger is not just about expanding AI—it’s about taking control of the full pipeline. The Starlink satellite constellation already delivers global internet coverage. With xAI integrated, the same infrastructure can support the delivery of AI services in real time. The model training, deployment, and access layers could all operate within one closed ecosystem.
This development raises significant questions. What happens when one private entity controls the launch systems, satellite grid, AI models, and delivery platforms? What frameworks will govern orbital data centres? These are now pressing issues for governments and international regulators.
Financial Significance
Multiple news sources confirmed the $1.25 trillion valuation. SpaceX reached a valuation of $1 trillion during its December 2025 internal stock sale. The value of xAI after its Series E funding round reached between $230 billion and $250 billion. Although no IPO announcement exists, various leaked documents indicate that the company plans to go public in June 2026. The potential IPO would become the largest public offering in history if it receives confirmation because it would exceed the size and strategic complexity of the 2000 Vodafone-Mannesmann transaction.
Tesla shareholders gain indirect ties to xAI through Tesla’s January 2026 confirmation of its $2 billion investment. The investment creates a merger between Musk’s various business ventures.
Strategic Implications for Tech Sectors
In aerospace, SpaceX’s dominance expands. No other private company has the combined capabilities of launch, satellite networks, and now orbital AI compute infrastructure. Competitors such as Blue Origin and Rocket Lab remain several steps behind.
In artificial intelligence, xAI’s Grok platform may still be maturing, but it now enjoys unprecedented backend support. The idea of training large language models outside Earth’s atmosphere is no longer theoretical.
In telecoms, Starlink continues to disrupt legacy players by offering internet access across remote and underserved regions. With AI workloads onboard, satellite networks will play a larger role in data processing and delivery.
Global Outlook
This isn’t a U.S.-only story. It’s unfolding in orbit.
Satellite internet and AI services deployed through Starlink bypass national infrastructure. Regulatory frameworks in the EU, China, India, and Africa will need to evolve. The European Union has already opened an investigation into xAI’s Grok platform, focused specifically on its use of multimodal training data and its ability to generate synthetic images and deepfakes. Simultaneously, astronomers and competitors have raised concerns about orbital debris related to SpaceX’s new satellite filings with the FCC.
The geopolitical and legal challenges of orbital AI infrastructure are beginning to surface.
What’s Next?
Watch closely for:
- Deployment of the AI-focused Starlink satellite constellation.
- Any formal announcement of a SpaceX-xAI IPO.
- Expansion of Grok into enterprise or global consumer markets.
- Regulatory responses from international agencies.
Industry analysts and regulators are watching both corporate and technical developments. With aggressive launch schedules and rapidly growing infrastructure, this isn’t a plan. It’s in motion.
The Road Ahead
Elon Musk has a track record of delivering against long timelines. With this merger, the infrastructure is being built now. A company that owns rockets, satellites, AI models, and public platforms has been formed, is privately held, and is valued at over a trillion dollars.
The scale of this development requires a global response. The industry is being reshaped. And the rules governing space, data, and intelligence are being rewritten in real time.