Elon Musk’s aerospace manufacturer SpaceX has acquired his artificial intelligence firm xAI, a move that could present an interesting investment prospect should the company go public in 2026.
The multibillionaire’s two startups combined in a $1.25 trillion merger, which could rise by a further $50 billion following an initial public offering (IPO), Bloomberg News reported.
In a statement on SpaceX’s website, Musk said: ‘SpaceX has acquired xAI to form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform. 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 deal has reportedly made Musk the first person ever worth $800 billion, according to Forbes, boosting his fortune by $84 billion overnight.
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The merger brings xAI’s Grok chatbot under the SpaceX umbrella, alongside the company’s spacecraft, rockets and satellite businesses. As SpaceX is expected to go public later in 2026, investors would gain exposure to all of these technologies through a single listing.
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Is the potential of AI investments worth it?
SpaceX’s potential IPO could prove attractive due to the AI element of its offering, says wealth manager Tim Blowers of financial planning firm Old Mill.
‘The impact of AI has been seen across all sectors, with those expected to benefit seeing significant increases – of which the technology sector clearly plays a part,’ he says. ‘With the “magnificent 7” representing a significant chunk of market weighted asset allocations, they will continue to have an impact.’
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The Magnificent 7 is a term coined by Bank of America analyst Michael Hartnett, referring to seven influential technology stocks on the public market: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
He adds: ‘The potential public listing of SpaceX should offer further opportunities in this growing market.’
Blowers notes that while investing in AI can be promising, it is important to maintain diversification, as with any investment.
‘There may also be an element of over-excitement of AI benefits, whilst cash balances are strong in many large cap technology stocks, meaning a leveraged dot-com style bust is unlikely, they could fall back if the benefit of AI is lower than expected,’ he says.
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Perhaps the most crucial element in the growth of AI, both technologically and financially, is the development of data centres, according to research from Goldman Sachs.
‘A lot of investors have struggled with the hype and quantifying what this all means,’ says senior equity analyst at Goldman Sachs, Jim Schneider, in the report.
By bringing xAI under the SpaceX umbrella, Musk has outlined ambitions to harness the benefits of space to support the growth of artificial intelligence.
‘My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space,’ he said on the SpaceX website. ‘This cost-efficiency alone will enable innovative companies to forge ahead in training their AI models and processing data at unprecedented speeds and scales, accelerating breakthroughs in our understanding of physics and invention of technologies to benefit humanity.’
Is this a long or short term investment?
AI investments, alongside other emerging technologies, are generally considered long-term financial bets. The growth of AI and technology is a key reason private equity is projected to deliver the highest returns of all alternative asset classes over the next 15 years, according to JP Morgan’s Long-Term Capital Market Assumptions. With their focus on aerospace and artificial intelligence, SpaceX and xAI fall within this long-term investment category.
However, careful consideration is required when assessing whether an individual investment suits a short or long-term strategy, says partner at wealth management firm Azura, Ali-Abbas Merali.
‘It very much depends on whether the investment is a short term trading opportunity to take advantage of gains at listing or a more fundamental longer term investment as the company lists and expands its investor base,’ Merali says. ‘Either way, an investment should be made with fundamental analysis.’
An investment of personality
As well as being the world’s richest person, Musk has a prolific media and online presence, which has affected the valuations of his companies both positively and negatively.
Shares of Musk’s electric car company Tesla dropped 14 per cent during a feud with US President Donald Trump in June 2025, wiping $150 billion off its market value. Musk has since ended his direct involvement with the White House.
Similarly, Musk’s fortune dropped by $100 billion in March following the explosion of a SpaceX rocket. The incident prompted many investors to offload their Tesla shares.
On the other hand, Starlink, Musk’s satellite internet communications network and a wholly owned subsidiary of SpaceX, has been a key driver of the aerospace company’s growing valuation. The business generated an estimated $11.8 billion in revenue in 2025, according to forecasts from market research firm Quilty Space. Considered reliable even during adverse weather conditions, Starlink could also help position SpaceX as a more stable investment.
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