SpaceX absorbs xAI in an all-stock merger valuing it at $250B

The exchange ratio was 0.1433 SpaceX shares per xAI share, with documents pricing xAI at $75.46 a share and SpaceX at $526.59. Bank valuation documents gave wider ranges: $859 billion to $1.26 trillion for SpaceX and $219 billion to $294 billion for xAI. Two Nevada entities created on January 21, 2026, were used to structure the combination. The funding gap drove the deal. xAI was reportedly burning about $1 billion a month, while SpaceX was profitable, with 2025 revenue reported near $15 billion against xAI's AI revenue of roughly $500 million. Musk argued that terrestrial power cannot meet AI electricity demand and that orbital data centers are the logical answer. The aftermath moved quickly. The combined company went public in June 2026, followed by a $60B acquisition of Cursor. The name changed to SpaceXAI on July 6. For AI founders, the lesson is that frontier model development is consolidating into groups that control capital and compute. Anyone building on Grok is no longer betting on an independent AI lab. Roadmap and pricing decisions now sit inside a rocket and satellite company. Startups competing on compute costs face a rival whose parent can fund losses from Starlink's profits.