Elon Musk has confirmed that SpaceX, his aerospace company, has acquired his artificial intelligence startup xAI. The announcement was shared by SpaceX and reposted by Musk on his social media platform X. Previously, xAI had merged with X, formerly known as Twitter, giving Musk control over both entities.

The combined company, valued at around USD 1.25 trillion, is expected to go public later this year. Reports indicate that the merger was finalized on Monday. xAI’s main product, Grok, is currently under investigation in the European Union due to concerns over its AI image generation capabilities, which some allege could produce sexualized images. xAI has stated that it has implemented restrictions to limit image editing by users.

Musk described the merger as creating an “innovation engine” by combining AI, rockets, space-based internet, and media under one roof. The integration could eventually allow AI data centers to be placed in space and powered by solar energy. Musk predicts that within two to three years, generating AI compute in space will be the most cost-efficient method, enabling faster AI model training and unprecedented data processing. This, he said, could accelerate advancements in physics, technology, and understanding the universe.

SpaceX confirmed that the new initiative will adhere to established space sustainability practices, including end-of-life satellite disposal. The merger follows SpaceX’s recent filing with the US Federal Communications Commission to deploy up to one million satellites designed as orbital AI data centers, offering extraordinary computing power for advanced AI applications and helping to advance humanity’s technological capabilities.