SpaceX says it plans to buy xAI in a $1.25T valuation deal

In short: SpaceX says it plans to acquire xAI at a combined $1.25 trillion valuation, linking AI software with space hardware and a pitch for data centers in orbit.

What happened

SpaceX announced plans to acquire xAI in a transaction described as taking place in February 2026. The companies put the combined valuation at about $1.25 trillion, which would make it one of the largest tech deals ever reported.

The idea is to combine xAI’s systems with SpaceX’s rockets and satellites. The companies say this could help with a growing problem on Earth, which is that large data centers are hitting power limits. A data center is basically a warehouse full of computers that run online services.

SpaceX and xAI point to “solar-powered orbital data centers” as part of the plan. That means putting some computing in space and powering it with sunlight (like running a giant server room on a solar calculator, but on a much larger scale). The goal is to reduce pressure on Earth’s electricity grids.

The announcement also fits a broader funding and deal-making wave in AI that is leaning toward infrastructure, not just new AI models. Meta recently acquired Moltbook, described as a social network for AI agents (software that can take actions on its own, like a helpful assistant that can also coordinate with other assistants). Separately, Nscale raised $2 billion to build “sovereign” AI facilities, meaning systems that keep data inside specific countries to follow local rules.

Why it matters

As AI use grows, the limiting factor is often electricity, cooling, and physical space for computers. If big companies push more computing into new places, including orbit, it could shape costs, reliability, and where digital services can expand next.

Source: TechCrunch AI