On May 6th, Elon Musk announced on social media that xAI will no longer exist as an independent company, and will be fully integrated into SpaceX, becoming its AI product line, and renamed SpaceX AI.
Musk’s statement was straightforward, saying, “xAI will no longer exist as an independent company, it will simply be SpaceX AI, the AI product of SpaceX.” This statement directly responded to market speculation about xAI’s independent status, and marked the end of a nearly three-month integration process, as Musk’s “space + AI” vertical integration strategy entered a new phase.
Musk’s statement was in response to a post by Tesla investor @SawyerMerritt about SpaceX’s partnership with Anthropic.
Just hours earlier, SpaceX AI had partnered with AI company Anthropic, allowing them to use SpaceX AI’s supercomputer Colossus 1’s over 300 megawatt computing resources, and the two companies expressed their intention to develop a gigawatt-scale orbital AI computing power.
Musk also stated that SpaceX will provide computing resources to other AI companies, as long as they use their own models to benefit humanity.
The roots of xAI’s creation lay in Musk’s complete split with OpenAI. In 2015, Musk co-founded OpenAI with Sam Altman, Peter Thiel, and others, with the goal of creating an open-source, non-profit AI institution to counterbalance tech giants like Google.
Initially, Musk not only invested funds but also deeply participated in strategic decision-making, but conflicts soon arose over control and development philosophy. In February 2018, Musk left the OpenAI board and terminated funding. After that, OpenAI gradually moved closer to Microsoft, accepting its massive investment and turning into a closed-source, for-profit model, which Musk believed betrayed the original intention.
In July 2023, Musk officially announced the establishment of xAI. This AI company, founded by Musk, gathered core AI talents from top institutions like OpenAI, Google DeepMind, and Microsoft Research, with an initial positioning as a public-benefit enterprise, and a core mission to “understand the essence of the universe”.
Over two years, xAI rapidly completed its technological and capital accumulation. In March 2024, it launched its first large model, Grok-1, and later iterated to Grok-4, with multimodal reasoning capabilities; in September of the same year, it built the Colossus training system equipped with 100,000 Nvidia H100 graphics cards, and in early 2026, it upgraded to Colossus 2, with 550,000 Nvidia GB200 GPUs, becoming the world’s first single-body AI training cluster with a gigawatt-scale computing power.
On the capital side, xAI completed multiple rounds of financing, with a total financing amount of over $42 billion, and in January 2026, its valuation rose to $230 billion after the latest round of financing, with investors including Nvidia, Cisco, and other leading tech companies.
As early as February this year, SpaceX announced that it would acquire xAI through an all-stock transaction, with a transaction value of approximately $1 trillion for SpaceX, and a valuation of $250 billion for xAI, making the combined entity’s valuation reach $1.25 trillion, setting a record for the highest valuation acquisition in history.
Regarding the core strategic logic of this integration, Musk has publicly stated multiple times that the core goal is to achieve a “space computing” ultimate layout. He explicitly pointed out that the Earth’s energy and heat dissipation limits will soon constrain AI computing power development, and predicted that the minimum cost of generative AI computing will shift to space within two to three years. In Musk’s plan, SpaceX AI’s core task is not just to compete with OpenAI and Google in the ground-based large model market, but to become the “space brain” of SpaceX’s space exploration.
This integration also completed the “data – model – computing power – communication – carrier” five-in-one closed loop of Musk’s core assets.
On the data side, the social media platform X generates over 500 million real-time human behavior data per day, providing continuous training support for the Grok model; on the model side, SpaceX AI will focus on four core businesses: Grok conversational AI, programming, image and video generation, and digital simulation; on the computing power side, it will build its own Colossus supercomputer series and layout space computing clusters; on the communication side, Starlink will provide global network coverage and data transmission; and on the carrier side, SpaceX rockets will be responsible for sending computing devices into space, forming an unbeatable competitive barrier.
However, the integrated SpaceX AI still faces many challenges. On the one hand, xAI had previously experienced the departure of its founding team, and Musk had rarely acknowledged that xAI was “significantly behind its competitors”, so how to quickly improve its technical competitiveness and catch up with industry giants like OpenAI and Anthropic after integration is a core problem for SpaceX AI. On the other hand, the layout of space computing power faces multiple challenges, including high technical difficulty, high investment costs, and strict policy regulation.
SpaceX plans to launch an IPO in the middle of this year, with a valuation target of $1.75 trillion, and the integration of SpaceX AI will be an important support point for its valuation. The commercialization prospects of space computing power and AI technology will directly affect the capital market’s valuation expectations for SpaceX. At the same time, xAI shareholders will be converted into SpaceX shareholders, sharing the benefits of the development of space and AI fusion, but also bearing the development risks after integration.
Meanwhile, Musk’s feud with OpenAI has not ended, but has escalated into a century-long lawsuit. In February 2024, Musk formally sued OpenAI, CEO Sam Altman, and President Brockman, accusing them of violating non-profit commitments and breaching trust obligations, and seeking $150 billion in damages.
On April 28th, 2026, the case was officially heard in the US Northern California Federal District Court, entering the witness testimony phase, with Musk, Altman, Brockman, and Microsoft CEO Nadella all testifying, and the trial is expected to last three weeks.
This lawsuit is seen as the most influential AI ethics and business dispute case in Silicon Valley history, and its outcome may reshape the global AI industry rules, directly affecting OpenAI’s planned IPO process this year.
As a leading AI company globally, OpenAI aims to complete its IPO in the fourth quarter of 2026, with a valuation target of $852 billion, planning to raise over $60 billion, which, if successful, will make it the highest-valued unicorn company in the global AI sector, and one of the largest IPOs in tech history.
