The major deal was announced on Monday in a statement by Elon on SpaceX’s website, saying the merger would form “the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform.”

The announcement also outlined Elon’s plans for space-based data centres. According to Elon, current advances in AI are dependent on large terrestrial data centres, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment.

“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilisation currently uses! ” he wrote. “The only logical solution, therefore, is to transport these resource-intensive efforts to a location with vast power and space. I mean, space is called ‘space’ for a reason.”

At its core, the deal reflects Elon Musk’s ambition to tightly integrate artificial intelligence with space, energy, and connectivity infrastructure so AI can scale far beyond the limits of Earth-based data centres. By bringing xAI into SpaceX, Elon said the aim is to power AI systems using satellite networks, solar energy, and space-based computing, reducing dependence on land, electricity grids, and cooling resources. The long-term vision is to use space as a platform for massive AI compute while simultaneously supporting global communications, scientific discovery, and humanity’s expansion beyond Earth.

“The capabilities we unlock by making space-based data centres a reality will fund and enable self-growing bases on the Moon, an entire civilisation on Mars and ultimately expansion to the Universe,” he wrote in his concluding statement.

Elon’s consolidation of these two companies is considered a record-setting deal. According to Reuters, referencing data compiled by LSEG, the purchase of xAI sets a new record for the world’s largest M&A deal, a distinction held for more than 25 years when Vodafone VOD.L bought Germany’s Mannesmann in a hostile takeover valued at $203 billion in 2000.

Reuters, which was also the first to report on the speculations regarding the deal while citing sources familiar with the matter, said that the deal represents one of the most ambitious tie-ups in the technology sector yet, with the transaction valuing SpaceX at $1 trillion and xAI at $250 billion. 

Investors in xAI will receive 0.1433 shares of SpaceX for every share of xAI as part of the acquisition. Some xAI executives may also opt for cash instead of SpaceX stock at $75.46 per share, the anonymous source told Reuters.

With this tie-up, Elon is combining a space-and-defence contractor with a fast-growing AI developer whose costs are largely driven by chips, data centres, and energy. It could also bolster SpaceX’s data centre ambitions as Musk competes with rivals like Google, Meta, Amazon-backed Anthropic, and OpenAI in the AI sector.

The merger comes as the space company plans a blockbuster public offering this year that could value it at over $1.5 trillion, two people familiar with the matter further told Reuters.

This is not the first time Musk has merged his business ventures. Last year, his social media platform X also joined xAI through a share swap. In 2016, he used Tesla’s stock to buy his solar-energy company SolarCity.

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The MY02 development aims to meet evolving business needs and support Malaysia’s digital transformation journey. It also reflects BDC’s commitment to providing scalable, resilient, and neutral data centres in Malaysia and the Asia Pacific.

Collaborating with Cyberview Sdn Bhd, the project marks the development of the largest data centre yet and is expected to increase IT capacity by about 87 MW over three phases, with each phase involving the construction of a three-story data centre.

BDC’s strategic investment aims to boost ancillary businesses and drive innovation across different industries. By investing in key sectors, the company aims to fuel economic growth, improve competitiveness, and create jobs. 

In recent years, Cyberjaya has experienced a notable increase in investments in data centres, reinforcing its position as a global technology hub. The city currently accommodates 15 commercial and captive data centres and serves as the location for 90% of Malaysia’s co-location data centres.

Kamarul Ariffin Abdul Samad, CEO of Cyberview Sdn Bhd, said, “BDC, recognised as one of the largest hyperscale data centre operators, aims to provide deeply integrated and mission-critical infrastructure, prioritising efficiency and cost-effectiveness with advanced cooling technology.” 

Speaking on the developments, Eric Fan, president of BDC, also shared, “Our ongoing expansion in Malaysia underscores our commitment to meeting the evolving needs of our customers and further solidifying our position as a key player in the data centre industry. With this latest development in Cyberjaya, we are poised to continue driving innovation and supporting the digital transformation of businesses across the nation.”

Meanwhile, Datuk Wira Arham Abdul Rahman, CEO of Malaysian Investment Development Authority (MIDA), commented, “This ongoing investment underscores BDC’s confidence in Malaysia, reinforcing our role as a regional data centre hub. Aligned with the New Industrial Master Plan (NIMP) 2030, BDC’s commitment contributes to the nation’s sustainable economic growth, the creation of high-skilled jobs for locals, and propelling the digital transformation journey.”

Ts. Mahadhir Aziz, CEO of Malaysia Digital Economy Corporation (MDEC), further added, “BDC, being the largest data centre development, establishing its presence here will boost Malaysia’s position, significantly attract substantial investment, and generate numerous employment opportunities.”

Patrick Png, vice president of solutions for APAC at BDC, also promised to “deliver cutting-edge solutions to meet the evolving needs of our clients. The MY02 data centre will embody our commitment to sustainability, boasting energy-efficient power and cooling technology alongside robust network connectivity. We are confident that these features will ensure uninterrupted IT operations and maximise performance for our valued customers.”

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