The billionaire is combining SpaceX and xAI in a deal that reportedly values the enlarged entity at $1.25 trillion

Elon Musk's SpaceX has completed the acquisition of his artificial intelligence startup xAI, the billionaire entrepreneur has announced. At about $1.25 trillion, it would be the largest corporate merger ever by implied value, public or private.

The acquisition is aimed at building a more integrated technology platform that combines artificial intelligence, rockets, satellite internet, directtodevice communications, and realtime computing infrastructure, the statement released by SpaceX on Monday reads.

Musk specifically cited the potential for space-based data centers as a future solution for the massive power requirements of the energy-intensive computing facilities necessary to power AI services, even though the concept is still unproven and largely theoretical.

"Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term," the billionaire said.

Sources cited by Bloomberg give SpaceX a valuation of $1 trillion and xAI a value of $250 billion, meaning the merger will create a combined enterprise with a potential value of $1.25 trillion, with shares reportedly to be worth $526.59 each.

READ MORE: Musk mulling mega-mergers Bloomberg

The move comes as SpaceX prepares for what is projected to become one of the largest initial public offerings on record, later this year. The combined company could be valued at more than $1.5 trillion once public, people familiar with the matter told Reuters on Monday. xAI investors will reportedly receive SpaceX stock as part of the transaction under terms that have not been publicly disclosed so far.

Despite widespread criticism of xAI's Grok chatbot over its promotion of racist content and the circulation of nonconsensual sexualized deepfake images involving women and children, the company has continued to attract investor interest during the global AI boom. In January, xAI said it had raised $20 billion in a Series E funding round led by major investors.

(RT.com)