WASHINGTON, Feb 3, 2026 (GeokHub) — U.S. space-related stocks climbed sharply on Tuesday after billionaire entrepreneur Elon Musk announced a landmark merger between SpaceX and artificial intelligence startup xAI, valuing the combined company at $1.25 trillion and accelerating plans to build artificial intelligence infrastructure beyond Earth.
The announcement triggered a broad rally across the emerging space sector. Shares of Rocket Lab rose nearly 4%, while Planet Labs gained over 1%. AST SpaceMobile jumped more than 4%, Intuitive Machines advanced close to 5%, and Redwire added about 2%, reflecting renewed investor optimism around commercial space innovation.
Musk said the merger is designed to create a vertically integrated technology powerhouse, blending advanced AI systems, rocket launch capabilities, satellite internet, direct-to-mobile communications, and real-time information platforms under a single corporate structure.
AI Beyond Earth
According to Musk, space could soon become the most cost-effective environment for artificial intelligence computing. He estimates that within two to three years, orbit-based infrastructure powered by solar energy could outperform Earth-based data centers as Big Tech companies pour hundreds of billions of dollars into the race toward artificial general intelligence — a theoretical stage where machines match or exceed human cognitive abilities.
Industry analysts say the deal represents a major validation of space as a critical component of future AI development.
“This is the strongest signal yet that space will underpin the next generation of AI,” said Mark Boggett, CEO of investment firm Seraphim Space, which tracks global space technology investment.
IPO Expectations and Investor Reaction
The merger involves two of the world’s largest privately held companies and comes amid reports that SpaceX is preparing for a blockbuster public offering later this year. Sources familiar with the matter say such an IPO could value SpaceX at more than $1.5 trillion, potentially making it the largest public listing in history.
Market analysts say the merger may further fuel investor enthusiasm ahead of a public debut.
“Some investors will buy into Musk’s vision of orbital data centers, and this could intensify anticipation for what may become the biggest IPO ever,” said Russ Mould, investment director at AJ Bell.
Ambition Meets Reality
Musk’s far-reaching ambitions have often drawn both admiration and skepticism. While companies like Tesla, SpaceX, and Neuralink have reshaped multiple industries, critics point to delayed timelines on projects such as Tesla’s full self-driving technology.
Still, Musk continues to push ahead. SpaceX has reportedly sought regulatory approval to deploy up to one million satellites to support space-based AI data centers. Analysts estimate that maintaining such a constellation would require launching around 200,000 satellites annually, an effort that could demand unprecedented levels of capital investment.
Some analysts believe the scale of the project may eventually force SpaceX to rely on public equity markets to fund its expansion.
