Elon Musk announced on Monday that SpaceX has acquired his AI startup, xAI, in a landmark deal that merges his ventures in artificial intelligence and space exploration.

The acquisition brings together SpaceX, known for rockets and satellites, with xAI, the creator of the Grok chatbot.

The deal is one of the most ambitious in the tech sector, uniting a space-and-defense company with a rapidly growing AI developer whose major expenses come from chips, data centers, and energy.

The move could also strengthen SpaceX’s data-center capabilities as Musk positions the company to compete with AI giants such as Google, Meta, Anthropic, and OpenAI.

The deal values SpaceX at $1 trillion and xAI at $250 billion, according to Reuters, citing a person familiar with the matter.

As part of the acquisition, xAI investors will receive 0.1433 shares of SpaceX for each share of xAI they hold.

Some xAI executives may choose to take cash instead of SpaceX stock, at a price of $75.46 per share, the source added.

“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.

The acquisition of xAI marks a new record as the largest merger and acquisition deal in the world.