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SpaceX, xAI eye $1.25T merger to fuse AI with Starlink infrastructure

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SpaceX, xAI eye $1.25T merger to fuse AI with Starlink infrastructure

Musk’s SpaceX and xAI are exploring a $1.25T merger to fuse Starlink’s satellite network with advanced AI, creating space-based data and compute infrastructure.

SpaceX and artificial intelligence startup xAI are engaged in early merger discussions that could result in a combined valuation of $1.25 trillion, Bloomberg News reported today.

The potential transaction would consolidate space infrastructure and artificial intelligence operations under a single corporate entity, both controlled by entrepreneur Elon Musk.

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SpaceX, valued at approximately $180 billion in 2025, operates the Starlink satellite broadband network comprising over 5,000 satellites. The company provides launch services to NASA, the Pentagon, and commercial customers.

xAI, established in 2023, develops advanced language models designed to compete with OpenAI’s GPT and Google’s Gemini platforms. The proposed merger could enable synergies across space-based computing, edge AI deployment, and satellite-driven data analysis, according to the report.

Industry analysts have indicated that integrating SpaceX’s global satellite network with xAI’s artificial intelligence capabilities could enable applications in defense, communications, and autonomous technology sectors.

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A $1.25 trillion valuation would position the merged company among the world’s most valuable private enterprises, reflecting investor expectations for growth in AI applications utilizing Starlink’s infrastructure.

The transaction faces several challenges, according to observers. SpaceX maintains a large and diverse investor base, while xAI remains closely held by Musk. Aligning shareholder interests will require negotiation between the parties.

Regulatory review is anticipated given the transaction’s scope across artificial intelligence, telecommunications, and aerospace sectors.

Technology experts have noted potential benefits including reduced AI inference latency and expanded access to data-rich environments. Execution risks remain substantial when combining two complex technology operations, analysts said.

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Musk, who leads both companies, is expected to maintain control following any merger. Market participants are monitoring for formal regulatory filings.

If completed, the transaction could significantly alter the competitive landscape at the intersection of artificial intelligence, space technology, and digital infrastructure in coming years.

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Crypto World

Pumpfun Unveils Investment Arm and $3 Million Hackathon

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Pumpfun Unveils Investment Arm and $3 Million Hackathon


PUMP rallied as much as 10% but erased its gains as crypto markets dipped.

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

Assets in spot Bitcoin (BTC) ETFs slipped below $100 billion on Tuesday following a fresh $272 million in outflows.

According to data from SoSoValue, the move marked the first time spot Bitcoin ETF assets under management have fallen below that level since April 2025, after peaking at about $168 billion in October

The drop came amid a broader crypto market sell-off, with Bitcoin sliding below $74,000 on Tuesday. The global cryptocurrency market capitalization fell from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko.

Altcoin funds secure modest inflows

The latest outflows from spot Bitcoin ETFs followed a brief rebound in flows on Monday, when the products attracted $562 million in net inflows.

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Still, Bitcoin funds resumed losses on Tuesday, pushing year-to-date outflows to almost $1.3 billion, coming in line with ongoing market volatility.

Spot Bitcoin ETF flows since Jan. 26, 2026. Source: SoSoValue

By contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP) and Solana (SOL) recorded modest inflows of $14 million, $19.6 million and $1.2 million, respectively.

Is institutional adoption moving beyond ETFs?

The ongoing sell-off in Bitcoin ETFs comes as BTC trades below the ETF creation cost basis of $84,000, suggesting new ETF shares are being issued at a loss and placing pressure on fund flows.

Market observers say that the slump is unlikely to trigger further mass sell-offs in ETFs.

“My guess is vast majority of assets in spot BTC ETFs stay put regardless,” ETF analyst Nate Geraci wrote on X on Monday.

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Source: Nate Geraci

Thomas Restout, CEO of institutional liquidity provider B2C2, echoed the sentiment, noting that institutional ETF investors are generally resilient. Still, he hinted that a shift toward onchain trading may be underway.

Related: VistaShares launches Treasury ETF with options-based Bitcoin exposure

“The benefit of institutions coming in and buying ETFs is they’re far more resilient. They will sit on their views and positions for longer,” Restout said in a Rulematch Spot On podcast on Monday.

“I think the next level of transformation is institutions actually trading crypto, rather than just using securitized ETFs. We’re expecting the next wave of institutions to be the ones trading the underlying assets directly,” he noted.