In a memo to staff posted on X, Musk said: \u201cSpaceX has acquired xAI to form the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet<\/a>, direct-to-mobile device communications and the world\u2019s foremost real-time information and free speech platform.\u201d<\/p>\n Musk is said to be considering a blockbuster IPO of SpaceX in June, to coincide with his birthday and the alignment of Jupiter and Venus<\/a>. The Financial Times reported last week that if the IPO went ahead, SpaceX would look to raise as much as $50 billion at a $1.5 trillion valuation, which would make it the biggest stock market flotation to date. Bankers at Goldman Sachs, JPMorgan, Morgan Stanley and Bank of America are understood to have been lined up to execute the IPO, which would net them hundreds of millions of dollars in fees.<\/p>\n The stars are aligning for Elon Musk\u2019s SpaceX float<\/p>\n DAN TUFFS\/GETTY IMAGES<\/p>\n On all financial metrics, a $1.5 trillion stock market valuation looks far-fetched even for the enlarged SpaceX. Based on that valuation and assuming $8 billion of annual profits last year, SpaceX trades at a price-to-earnings ratio of 188 times.<\/p>\n For context, the wider S&P 500 index, home to the 500 biggest companies listed in the United States, trades on a price-to-earnings nearer to 28 times. The average price-to-earnings multiple for the top seven on the Footsie is 22 times.<\/p>\n A higher valuation multiple is effectively the market betting on future growth. Could SpaceX deliver the kind of earnings, further down the line, that would justify such a hefty price tag? After all, last summer it was valued at only $400 billion<\/a> or so.<\/p>\n By folding xAI into SpaceX, Musk is unifying his AI and space ambitions. As Dan Ives, the veteran technology industry analyst at Wedbush, said: \u201cThe long-term goal of this merger is to create a new low-cost way to generate AI compute \u2026 through satellite deployments for space-based data centres to harness solar energy as fuel for its AI ambitions.\u201d<\/p>\n A Tesla Cybercab self-driving car<\/p>\n VCG\/VCG VIA GETTY IMAGES)<\/p>\n Ives speculated there was a \u201cgrowing chance\u201d that Musk would eventually want to fold Tesla, his electric car manufacturer, into SpaceX too.<\/p>\n \u2022 Dominic O\u2019Connell: Luckily for Musk, Tesla investors are buying into the hype<\/a><\/p>\n \u201cTesla now is laser-focused on autonomous and robotics<\/a> in this key era for Musk & Co and we expect more cross-pollination between Tesla and SpaceX over the coming year,\u201d he said.<\/p>\n If the consensus that AI is going to change the world is correct, then more data centres will be needed. But developers are constrained by the availability of land and power<\/a> and the ability to keep the buildings cool \u2014 or at least they are on Earth.<\/p>\n Musk, and other astrophiles, believe those issues can be solved by having data centres in space, which is cold and where there is no shortage of land or (solar) power.<\/p>\n \u201cGlobal electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment,\u201d Musk said in his memo. \u201cIn the long term, space-based AI is obviously the only way to scale.\u201d<\/p>\n Mark Boggett, chief executive of Seraphim Space, a space-focused investment company, said Musk could take the business in a couple of directions: use its extraterrestrial data centres to create the world\u2019s most powerful AI company, or charge other AI companies to use those data centres.<\/p>\n![\"Elon](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/02\/\/95f440ed-9c04-41fe-826b-2c67e062a7c2.jpg\")
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