Musk has just done something big that could change the landscape of global capital markets: officially merge xAI into SpaceX.
The merger directly created a supertech giant with a valuation of up to $1.25 trillion, and Musk's personal net worth soared to $850 billion.
But for investors, it's not just about getting bigger. UBS pointed out in its latest research report on February 4 that this marks the official beginning of the "orbital AI era" - that is, moving AI data centers into space.
However, this also completely changed SpaceX's original investment logic: in the past, SpaceX was seen as a space infrastructure company with strong cash flow and a clear business model (making money by launching satellites and sending people to the sky); Now, it has become a hybrid of "space + AI".
This means: investors should not only evaluate SpaceX's rocket and Starlink businesses; It also has to pay for xAI's potential tens of billions of dollars in future burning investments (such as building an "orbital data center").
And as SpaceX's potential $50 billion IPO draws closer, all institutional investors must rethink: Are we investing in a space company or a high-risk, high-investment AI space dream?
This is both a huge opportunity and a new risk - the story has changed, and so has the gameplay.
The reconstruction of the trillion-dollar empire: Musk's "ultimate bet"
As early as September 2024, it was predicted that Musk would become the world's first trillion-dollar richest man in 2027, relying on his big gamble on the "space race".
Today, this prophecy is accelerating to come true.
At the beginning of this week, Musk quickly took action and officially merged his AI company xAI into SpaceX through an all-stock transaction. UBS analyst Jephine Wong breaks down the deal's valuation in his latest report:
The combined new entity is valued at a total of approximately $1.25 trillion;
Among them, SpaceX accounts for $1 trillion and xAI accounts for $250 billion.
You know, a few years ago, former WeWork CEO Adam Neumann also declared that he wanted to be a "trillionaire", and now his company has long since fallen from the altar - while Musk's empire is flying higher and higher.
According to internal documents, the merger will replace SpaceX's equity at $526.59 per share.
This is not only a financial integration, but also a clear strategic statement: SpaceX is no longer just building rockets and launching satellites, it is sending AI into space to create a new ecology of "orbital intelligence".
|“ Orbital AI": From science fiction to capital stories
UBS pointed out in the latest research report that the real highlight of Musk's move is not the merger itself, but the grand idea behind it - "orbital AI".
To put it simply, Musk doesn't just want to spell computing power on the ground, he bets that in the next 2 to 3 years, some of the key AI computing power will be moved to low Earth orbit, that is, "space data centers" will be used to handle AI tasks.
To support this idea, SpaceX has submitted a surprising application to the Federal Communications Commission (FCC): it plans to launch up to 1 million satellites dedicated to computing - not just communications, but "thinking" orbital servers.
UBS believes that the integration of xAI into SpaceX is precisely to take advantage of SpaceX's absolute advantage in the field of low-orbit satellites to seize the commanding heights of next-generation AI infrastructure.
And this story also directly serves SpaceX's upcoming IPO this summer and autumn. It wants to convey a bold but enticing logic to investors: there is almost unlimited solar energy, a natural cooling environment, and global coverage in space - in the future, the cheapest and most efficient AI computing power may not be in Silicon Valley, but in the sky.
Financial truth: on one side is the "money printing machine", on the other side is the "money shredder"
Putting aside the grand vision of "orbital AI", UBS reminds investors to see the financial reality behind the merger - this time it is actually tying a money-making company and a company that burns money like crazy.
SpaceX: Steady "cash bull": backed by 9 million Starlink users + the absolute leader of the global rocket launch market; revenue is expected to reach $15 billion to $16 billion in 2025; It can generate about $8 billion in EBITDA (core profit in simple terms); Originally, it was a high-quality target with high growth, high profit, and stable IPO profits.
xAI: High-speed "money-burning machine": In the first nine months of 2025, revenue was only $210 million;
However, spending in the same period was as high as $8 billion – $9.5 billion; Although it has raised more than $20 billion (including Tesla's $2 billion), it is still burning nearly $1 billion a month.
What is the essence of the merger? UBS hit the nail on the head: this is using SpaceX's healthy "muscles" to feed xAI's huge "appetite".
Jingtai Views| IPOs are imminent, but investors need to be more cautious
Although SpaceX management emphasized that the merger of xAI will not affect the 2026 listing plan, the company is still moving forward with its IPO and has begun to reach out to cornerstone investors, with a target funding potential of up to $50 billion.
But here's the problem: the story told to investors has completely changed.
Previously, SpaceX was a clear, hard-core "space infrastructure" story - building rockets, launching satellites, collecting Starlink subscription fees, strong cash flow, and predictable growth.
Now, it has become a complex hybrid of "space + AI": both to evaluate the profitability of the rocket business and to pay for the potentially hundreds of billions of dollars of xAI burning in the future.
The market reaction also revealed doubts: EchoStar, which holds about 3% of SpaceX's shares, fell after the merger was announced; UBS analyst John Hodulik pointed out that this shows that not all investors are buying the new story of "orbital AI".
Today, investors face a difficult question: is this packaging high-quality assets and future engines, or is it "stuffing" high-risk AI projects into a money-making machine?
