• SpaceX has officially acquired xAI, merging its AI platform with Musk's space ambitions.
• The deal values the combined company at approximately $1.25 trillion.
• Musk plans to launch space-based data centers to support AI operations.

Elon Musk's SpaceX has announced its acquisition of xAI, a move aimed at consolidating Musk's diverse business interests in both artificial intelligence and aerospace technologies. This merger positions SpaceX to become a leader in AI-powered space initiatives, thereby creating an "innovation engine" that integrates AI technologies with rocket and space internet capabilities, according to Business Insider and Reuters.

The merger is reported to have a valuation of $1.25 trillion, with share prices expected to be set around $527. This strategic acquisition not only combines two of Musk's most high-profile ventures but also taps into anticipated revenue streams from Starlink and potential public offerings later this year, as detailed by Los Angeles Times and South China Morning Post.

Musk outlined that this merger will allow for "the most ambitious, vertically-integrated innovation engine on (and off) Earth," which includes the vision for deploying space-based data centers. He emphasized that the future of cost-effective AI computations will be rooted in space, enhancing data processing capabilities critical for AI advancements, according to BBC and Los Angeles Times.

Furthermore, with plans to launch up to one million satellites to support this initiative, SpaceX aims to leverage its existing Starlink network, which has been increasingly generating substantial income. This merging of capital and expertise is seen as crucial for sustaining xAI's ambitious goals, which reportedly incurs monthly costs around $1 billion, according to Reuters and South China Morning Post.