SpaceX announced today that it has acquired xAI, Elon Musk’s AI company, in a deal that creates a combined entity reportedly valued at $1.25 trillion ahead of a planned IPO. The acquisition notably does not include Tesla,

My estimate is that within two to three years, the lowest cost way to generate AI compute will be in space,” Musk wrote in a post on SpaceX’s website on Monday.

Elon Musk has once again fueled merger speculation after reports said SpaceX is exploring a potential tie-up involving xAI and Tesla Inc. (NASDAQ:TSLA) as it prepares for what could be one of the largest IPOs in history.

In Tesla's annual financial filing, the company said that last year it sold $430 million worth of its energy storage products to xAI, Elon Musk's AI startup.

Tesla earnings beat Wall Street's estimates. The stock rose in after hours trading. A call with analysts is scheduled for 5:30 p.m. ET.

B xAI deal done, Model S/X axed, energy soars to $3.84B record, capex doubles to $20B+ as first revenue drop hits.

Tesla has pledged a $2 billion investment in Elon Musk’s AI startup, xAI, emphasizing its push towards autonomy and robotics. Investors are keenly watching Tesla’s self-driving and robotaxi developments,