SpaceX to Invest $2B in xAI, Boosting Musk’s AI–Space–Tech Ecosystem

Elon Musk’s SpaceX is set to inject $2 billion into xAI, his artificial intelligence venture, as part of a larger $5 billion equity financing round. This marks the aerospace firm’s first major external investment and sends a clear signal that Musk is intertwining his AI ambitions with his space operations.

The deal follows xAI’s merger with X (formerly Twitter), which collectively raised the company’s valuation to around $113 billion. The flagship product, Grok, is already deployed to enhance customer support for Starlink and is being eyed for integration in Tesla’s upcoming Optimus humanoid robots.

SpaceX’s massive financial commitment comes amid its ongoing investment in the ambitious—but delayed—Starship rocket program, which has experienced multiple setbacks this year. With over $3 billion in cash reserves, the company is demonstrating a willingness to place big internal bets alongside its space exploration agenda.

Despite a recent controversy over Grok’s biased responses, Musk has defended the AI model, calling it “the smartest AI in the world.” He also expressed interest in having Tesla invest in xAI, with the caveat that such a move would require board and shareholder approval.

The SpaceX investment underscores Musk’s long-standing strategy of deploying his companies’ resources to reinforce one another—from funding Tesla in its early years to helping acquire Twitter. As xAI continues to race OpenAI and Meta, the deal cements Musk's unified tech ecosystem—spanning space, social media, robotics, and AI.