Background: Elon Musk controls an enormous empire of tech companies. We're talking Tesla to X (aka Twitter) to Neuralink, xAI and SpaceX. But SpaceX is the clear crown jewel. The private space and satellite company runs Falcon launches and Starlink and reportedly earned about US$8 billion in profit on US$16 billion in revenue last year.

What happened: While Musk is expected to take SpaceX public at a valuation near $1.25 trillion USD later this year, he has made a move sooner. Now, Musk has announced that SpaceX will acquire xAI, folding his AI and data ambitions into his most valuable business. Because xAI also owns X (formerly Twitter), the deal effectively pulls Musk’s social platform, AI models and space operations under one roof.

What else: Musk described the merger as the a move he described as the “next chapter” of his mission that allows him to build a so-called “sentient sun” - whatever he means by that. And while some are excited by the unifying-move, others believe there are alternative motives at play for Musk.

What's the key learning?

💡Elon Musk doesn’t really build stand-alone companies - he builds a web of interconnected companies. Musk has a long history of stitching his companies together through share swaps and acquisitions:

• In 2016, Tesla used its stock to acquire SolarCity for US$2.6 billion
• Last year, Twitter (now X) was folded into xAI via a US$33 billion share swap

💡Supporters argue the deal gives SpaceX access to AI talent and data, while critics say Musk has a pattern of using his most valuable businesses to absorb earlier-stage or loss-making ventures.

💡With SpaceX already generating billions in profit, folding in xAI and X makes it harder for investors to see which parts of the empire are actually driving profitability... especially ahead of a potential IPO.