Shares across the space sector moved higher on Tuesday after Elon Musk announced a merger between SpaceX and xAI that values the combined group at $1.25 trillion.
The transaction marks a major step in Musk’s ambition to scale artificial intelligence infrastructure beyond Earth. He said the cheapest way to generate AI computing capacity will be in space within the next two to three years, as leading technology companies intensify efforts to reach artificial general intelligence.
In premarket trading, Rocket Lab (NASDAQ:RKLB) advanced 3.6%, Planet Labs (NYSE:PL) gained 3.3%, and AST SpaceMobile (NASDAQ:ASTS) rose 2.5%. Other space-focused names also saw gains, with Intuitive Machines (NASDAQ:LUNR) up 1.9% and Redwire (NYSE:RDW) jumping 4.9%.
On Monday, Musk said the merger would create a “vertically integrated and ambitious innovation powerhouse”, bringing together artificial intelligence, launch systems, space-based internet, direct-to-mobile communications, and a platform for real-time information and free speech.
The deal comes as Musk positions the combined company to play a central role in the race toward artificial general intelligence, a theoretical point at which machines could outperform human cognitive abilities.