SpaceX Acquires xAI in $1.25 Trillion All-Stock Deal, xAI Launches Grok Imagine 1.0

Highlights

• SpaceX acquired xAI in a $1.25 trillion all‑stock deal, combining AI research with space infrastructure. SpaceX valued at $1T, xAI at $250B.
• Musk plans to deploy up to one million satellites to enable large‑scale AI computing in space.
• xAI launched Grok Imagine 1.0, an AI video generation platform with text‑to‑video, image‑to‑video, cinematic editing tools, and an API suite.

SpaceX has officially acquired artificial intelligence company xAI in an all-stock transaction. The details were disclosed in a statement published on SpaceX’s website and signed by Elon Musk. The move brings AI development together with launch systems, satellite networks, space-based internet, and direct-to-device communications under a single corporate structure.

According to SpaceX, the integration is designed to combine xAI’s AI models and research with SpaceX’s space infrastructure to support large-scale AI computing. Musk noted that most AI development today depends on terrestrial data centres, which are increasingly constrained by power availability and cooling requirements, making it difficult to meet rising global demand using ground-based infrastructure alone.

“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!” Musk said.

SpaceX’s Plan for Space-Based AI Computing

In the official statement, Musk said large-scale AI computing could become more cost-effective in space within the next two to three years. He highlighted that space-based systems powered by near-continuous solar energy could significantly reduce the operational limitations faced by land-based data centres.

As part of this long-term strategy, SpaceX said it is seeking permission to deploy up to one million satellites. These satellites would support scalable AI model training and large-scale data processing, alongside the company’s existing space launch and connectivity initiatives.

“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment,” Elon Musk wrote in the statement. “In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses.”

Deal Valuation and Key Details

Bloomberg reported that the all-stock transaction values the combined SpaceX–xAI entity at $1.25 trillion, citing people familiar with the matter. According to the report, SpaceX is valued at $1 trillion, while xAI is valued at $250 billion. These figures were reportedly shared with employees in an internal memo on Monday.

SpaceX did not disclose valuation details in its public announcement.

Bloomberg further reported the following details related to the deal and SpaceX’s broader operations:

• The transaction is an all-stock deal with combined share value estimated at $526.59
• SpaceX is still planning an initial public offering later this year
• A prior SpaceX share sale was considered at up to $50 billion
• xAI raised funding in January at a valuation of around $230 billion
• xAI is spending approximately $1 billion per month
• SpaceX has filed for regulatory approval to launch up to one million satellites
• Starlink currently operates more than 9,000 satellites and now generates more revenue than SpaceX’s launch business

The report added that the merger further consolidates Elon Musk’s businesses, following his acquisition of Twitter in late 2022 and its subsequent merger with xAI in a $33 billion deal. While SpaceX remains Musk’s most established company and a key launch provider for NASA and the US Department of Defense, revenue from the Starlink satellite network could help support xAI’s capital-intensive AI operations.

Future developments will depend on regulatory approvals, satellite deployment timelines, and progress toward SpaceX’s proposed public listing.

xAI Launches Grok Imagine 1.0 for AI Video Generation

Separately, xAI recently launched Grok Imagine 1.0, a major update to its AI-powered video generation and editing platform. The company said the new version improves video quality, cost efficiency, and latency, while enabling faster iteration for creators and developers.

xAI also claimed that Grok Imagine generated 1.245 billion videos in the past 30 days.

Grok Imagine 1.0 supports video generation of up to 10 seconds at 720p resolution, along with improved audio output. The model allows video creation from text prompts or static images with enhanced motion handling, object interaction, and visual continuity across scenes.

Grok Imagine API and Features

Alongside the model update, xAI introduced the Grok Imagine API, a unified API suite designed for end-to-end creative workflows. The API combines video and audio generation with video editing tools, allowing users to create or refine content within a single workflow. It supports text prompts, image inputs, and complex cinematic refinements.

Key features include text-to-video and image-to-video generation, cinematic motion with realistic object interaction, visual continuity across frames, flexible clip lengths, and support for multiple aspect ratios.

Editing tools allow users to add, remove, or swap objects, transform scenes, control colour and objects, animate characters using user-provided performance, restyle existing footage, and convert sketches into animated visuals. xAI says performance has been optimised for latency, concurrency, and cost with native video-audio generation aligned with industry benchmarks.

Availability and Use Cases

xAI says Grok Imagine is designed for creators and influencers, educators and designers, creative and marketing teams, enterprise video workflows, and general users looking to turn ideas into video content.

The Grok Imagine API is available through partner platforms as well as xAI’s own APIs with SDKs, tutorials and a hosted console for experimentation.

Users can try Grok Imagine at: http://grok.com/imagine

FAQs

Q1. What was the value of SpaceX’s acquisition of xAI?

Answer. SpaceX acquired xAI in an all‑stock deal valued at $1.25 trillion, combining AI research with space infrastructure. SpaceX was valued at $1T and xAI at $250B.

Q2. What is SpaceX’s plan for space‑based AI computing?

Answer. Elon Musk outlined a strategy to deploy up to one million satellites to support large‑scale AI model training and data processing, powered by near‑continuous solar energy.

Q3. What new product has xAI launched after the merger?

Answer. xAI introduced Grok Imagine 1.0, an AI video generation and editing platform with text‑to‑video, image‑to‑video, cinematic editing tools, and a unified API suite.

Also Read –

https://www.mymobileindia.com/spacex-is-blocking-apples-satellite-messaging-expansion-report/

https://www.mymobileindia.com/airtel-and-jio-partner-with-spacex-to-bring-starlink-internet-to-india/