Elon Musk is merging his SpaceX rocket company with his artificial intelligence startup xAI. The deal is valued at $1.25 trillion.

The record-setting transaction is the largest merger of all time and values SpaceX at $1 trillion and xAI at $250 billion, according to documents viewed by CNBC.

Elon Musk, the world's richest man, just combined his companies SpaceX and xAI, creating the most valuable privately-owned company in the world.

XAI and SpaceX branding will stay separate and collaboration will be limited, the company told staff.

Maybe combining Musk’s companies is really about space AI data centers. But reports from Bloomberg and the Wall Street Journal indicate that SpaceX’s IPO pursuit includes a push to have major index providers find a way around the usual waiting periods before they’ll add newly listed companies.

Elon Musk's net worth has quadrupled since 2024, and a successful SpaceX IPO could push his wealth well over $1 trillion.

As part of an antitrust lawsuit related to App Store rankings, OpenAI has accused xAI of using ephemeral messaging apps to destroy evidence.

For much of the past three years, Elon Musk’s xAI has tried to compete against the leading AI labs, including OpenAI, the company he co-founded and later clashed with. The results have been mixed: xAI’s flagship product,