SpaceX swallowed Elon Musk’s AI company xAI in a deal valued at $1.25 trillion, and not everyone on Wall Street is popping champagne about it.
The merger, completed around the start of February 2026, combined SpaceX’s $1 trillion valuation with xAI’s $250 billion price tag. What followed was a rapid-fire transformation: rebranding services under the SpaceXAI banner, rolling out Grok AI models, and sketching plans for orbital AI data centers powered by the Starlink satellite network. Then came a record-setting IPO in June, with the combined entity fetching a valuation somewhere between $1.5 trillion and $1.77 trillion.
The financials tell two very different stories
In 2025, xAI posted operating losses of roughly $6.355 billion against revenues of just $3.201 billion. The company spent more than $12.7 billion on infrastructure alone that year.
In Q1 2026, SpaceX reported total revenue of approximately $4.69 billion but swung to an operating loss of $1.94 billion, with AI expenditures dragging the whole operation into the red.
