TLDR

  • SpaceX and xAI have combined to create a merged entity projected to go public via IPO at a valuation of $1.25 trillion
  • The merged company takes over SpaceX’s bitcoin assets—roughly 8,300 BTC, valued at about $650 million currently
  • Elon Musk cited the need for space-based AI (stating it’s “obviously the only way to scale”) as the merger’s core rationale
  • This transaction centralizes crypto exposure within Musk’s business portfolio, alongside Tesla’s existing bitcoin holdings
  • SpaceX has owned bitcoin since 2021 and, unlike Tesla, has refrained from trading its position

Elon Musk has merged his rocket manufacturer SpaceX with his artificial intelligence startup xAI. Per Bloomberg, the combined entity is anticipated to launch an IPO at a $1.25 trillion valuation.

Musk justified the merger by outlining the logic behind integrating space technology with AI development. He noted that modern AI advancements rely on large data centers requiring massive power and cooling resources. According to Musk, meeting global AI electricity demands with ground-based solutions would cause hardship to communities and the environment.

“In the long term, space-based AI is obviously the only way to scale,” Musk wrote. He added that harnessing even a millionth of the Sun’s energy would require over a million times more energy than current civilization uses.

As the merged company prepares for its public listing, SpaceX’s bitcoin holdings are coming into sharp focus. SpaceX purchased approximately 8,300 BTC in 2021, and this stake is now worth roughly $650 million at current market prices.

Bitcoin Accounting Challenges Ahead of IPO

The bitcoin holdings represent a small fraction of the company’s overall valuation. However, they will be critical for accounting practices, disclosure requirements, and investor perception once the IPO process begins.

SpaceX has remained private since acquiring its bitcoin position. This has shielded the company from the quarterly earnings volatility that public firms face under fair-value accounting rules. That protection will end once IPO preparations commence.

Tesla’s experience with bitcoin serves as a reference point for what SpaceX might encounter. The automaker has recorded hundreds of millions of dollars in paper losses during market downturns, even without selling any of its holdings.

The merger consolidates crypto exposure into a single corporate structure. This occurs at a time when bitcoin has seen extreme volatility following recent liquidation-driven selloffs.

Different Approach Than Tesla

SpaceX has adopted a distinct strategy for its bitcoin position compared to Tesla. While Tesla has previously sold and repurchased bitcoin, SpaceX has shown little interest in trading its holdings. This stability could appeal to long-term investors, but it also reduces flexibility if market conditions worsen during the IPO window.

The deal raises questions about crypto asset management across Musk’s business empire. Tesla, SpaceX, and xAI have operated under different disclosure regimes, accounting treatments, and capital structures—Tesla is a public company, while SpaceX and xAI were private.

The combined company will need to establish clear policies for managing its bitcoin position, including decisions about holding, selling, or expanding the stake.

Bloomberg reported that xAI recently raised funds at a $230 billion valuation. SpaceX was valued at approximately $800 billion in its most recent funding round.

The merger creates one of the world’s most valuable private companies before its planned IPO. The $650 million bitcoin position will now be subject to public company disclosure and accounting requirements.