The Deep View:  MARKETS. Will xAI gain legitimacy from SpaceX tie-up?

Posted on February 3, 2026 by michelleclarke2015
 
MARKETS

Will xAI gain legitimacy from SpaceX tie-up?

Elon Musk just moved $250 billion from one pocket to another. On Monday, Musk’s aerospace firm SpaceX announced it would acquire xAI, his AI company that also owns the social media platform X.

Although the companies did not disclose the financial terms of the deal, The Information reported that the acquisition is valued at $250 billion.The combined company stated in its announcement that the acquisition would form “the most ambitious, vertically-integrated innovation engine on (and off) Earth.” SpaceX reiterated its ambition to build space-based data centers to harness solar energy for AI training. “This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars,” the company said in its announcement. 

According to Bloomberg, the deal notches the combined company a $1.25 trillion valuation ahead of its upcoming IPO, and is expected to price the shares at $526.59 each. Notably, this valuation would allow SpaceX to leapfrog OpenAI as the world’s most valuable startup (and likely fuel Musk’s rivalry with CEO Sam Altman).

OpenAI is targeting a valuation of up to $830 billion as it courts investors for an upcoming twelve-figure funding round. The deal also adds another layer to Musk’s Russian nesting doll of companies, as xAI acquired X, formerly Twitter, last March, in a deal worth $45 billion ($33 billion when taking into account its $12 billion in debt), bringing together the companies’ “data, models, compute, distribution and talent.” That deal helped ease investor concerns as the social media platform’s value declined under Musk’s stewardship.Along with pleasing investors (and outmaneuvering Altman), this move could give xAI greater legitimacy. The company has been embroiled in scandal after scandal for the outputs of its flagship model, Grok, ranging from spewing antisemitic content to generating millions of nudes, some of which are underage, earning it an “unacceptable risk” ranking from advocacy organization Common Sense Media. While the acquisition might not change the model itself, being in proximity to SpaceX could elevate the company’s reputation among peers such as OpenAI, Anthropic, and Google.
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About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.
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