Valuation and IPO timing for combined entity

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Elon Musk plans to merge SpaceX with xAI, according to people familiar with the matter, in a deal that encompasses the billionaire’s increasingly costly ambitions to dominate artificial intelligence and space exploration.

The deal was announced in a memo on Monday, the people said, asking not to be identified as the information isn’t public. The combined company is expected to price the shares at about $527 each, and would have a valuation of $1.25 trillion, some of the people said.
Representatives for SpaceX and xAI didn’t immediately respond to requests for comment.
Bloomberg News earlier reported on the discussions. SpaceX is planning an initial public offering that could raise as much as $50 billion, Bloomberg News has reported. It also discussed a possible merger with Tesla.

The deal brings together two of the largest closely held companies in the world. XAI raised funds at a $230 billion valuation in January, while SpaceX was set to go ahead with a share sale in December at about a valuation of about $800 billion, Bloomberg reported, and is exploring a possible IPO.

It also further entangles Musk’s various business ventures. The billionaire acquired social media platform Twitter in late 2022, renamed it X, then merged the site with his artificial intelligence startup xAI in a $33 billion deal. XAI, which also operates chatbot Grok, is an expensive operation, burning around $1 billion a month in service of its stated ambition to gain “a deeper understanding of our universe.” A merger with SpaceX pools capital, talent, access to compute — and blurs corporate boundaries.

The tie-up may crystallize Musk’s vision to put data centers in space to do complex computing for AI. SpaceX is requesting permission to launch as many as a million satellites into the Earth’s orbit for the plan, according to a filing Friday.

Today's show features:

• Gil Luria, Managing Director and Head of Technology Research at DA Davidson, breaks down quarterly earnings from Palantir and and Elon Musk's plans to merge SpaceX with xAI
• Bloomberg Tech Co-host Ed Ludlow on how Elon Musk aims to dominate both artificial intelligence and space exploration
• Jayati Bharadwaj, Director of FX Strategy at TD Securities, on the recent weakening in the US dollar
• Paisley Nardini, Head of Multi-Asset Solutions at Simplify Asset Management, on why she sees the rotation trade into value stocks taking hold

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