The Journal. — “Elon Musk’s $1.25 Trillion Megamerger”

Date: February 6, 2026
Hosts: Ryan Knutson & Jessica Mendoza
Main Guest: Berber Jin, WSJ Technology Reporter

Episode Overview

This episode dives deep into Elon Musk’s unprecedented merger between XAI, his artificial intelligence company, and SpaceX, his aerospace giant, creating a combined $1.25 trillion enterprise. The hosts and their guest, reporter Berber Jin, explore Musk’s vision, motivations, and the massive implications for business, technology, and the future of AI in space. They discuss the logic (or audacity) of the merger, reactions from investors, and what it means for the forthcoming SpaceX IPO.

Key Discussion Points & Insights

1. The Anatomy of the Megamerger

• Announcement Recap

  • Elon Musk’s merger joins XAI (AI research, “truth-seeking” chatbot Grok) and SpaceX (rockets, Starlink) into one entity valued at $1.25 trillion ([00:24]).
  • Such a large valuation is rare: “Not a lot of companies cross the $1 trillion mark.” (Jessica Mendoza, [00:36])

• Musk’s Vision

  • Musk’s blog post laid out his bold goals:

    “Extend the light of consciousness to the stars, enable the creation of colonies on Mars, and ensure humanity’s multiplanetary future.” (Jessica Mendoza, quoting Musk’s blog, [03:09])

  • Core rationale: combining AI with space infrastructure to create data centers in space, powered by the sun.

2. Why AI Data Centers in Space?

• Theoretical Benefits

  • Earth-based data centers use immense land and power; space offers abundant room and solar energy ([03:47], [04:01]).
  • Musk’s logic:

    “Space is called space for a reason. 😂” (Paraphrased from Musk’s blog, [03:28])

  • Powerful solar energy in orbit could supply vast data centers.

• Engineering Obstacles

  • Building and operating data centers in orbit is a daunting technical challenge; even the most optimistic backers admit results are years away ([04:28]).
  • Musk is driven by his lifelong obsession to “move civilization from Earth to Mars.”

3. Silicon Valley and Big Tech Eyes on Space AI

• Other tech titans are considering it:
  • “Sam Altman, Sundar Pichai at Google, Jeff Bezos...they’ve all talked about this idea...Google has launched some pilot programs.” (Berber Jin, [05:14])
  • Musk’s public statement at Davos:

    “The lowest cost place to put AI will be space. That’ll be true within two years, maybe three, three at the latest.”
    (Elon Musk, quoted at [05:36])

4. Financial Rationale and XAI’s Struggle

• AI Needs Capital
  • XAI needs huge funding and computing power; “it was very difficult for XAI to survive as an independent company in the long term.” (Berber Jin, [06:09])
  • Recent cash infusion: Tesla recently invested $2 billion into XAI ([06:31]).
  • Musk previously merged X (Twitter) with XAI as a move to “fortify two struggling businesses in Elon’s empire.” (Berber Jin, [06:59])
• SpaceX as Lifeline for XAI
  • SpaceX’s robust finances stabilize XAI and let it focus on long-term AI development ([07:27]).
  • Merger makes XAI part of an upcoming, blockbuster SpaceX IPO, possibly outpacing rivals like OpenAI and Anthropic ([07:57]).

5. Shareholder Reaction

• XAI investors: “Very happy...none of them even before this was announced expected XAI to be an independent company...everyone was expecting the company to merge.” (Berber Jin, [08:47])
• SpaceX investors: More “nervous and mixed”; actively working to “buy into Elon’s vision.” ([09:12])

6. What’s Really in It for SpaceX?

• SpaceX is already “the crown jewel” of Musk’s empire, dominant in rocket launches and Starlink internet ([10:04]).
• Before the merger, SpaceX was a client and investor in XAI, using a custom Grok chatbot nicknamed “Spock” ([10:18]).
• No immediate financial benefit from XAI, but offers synergy in co-developing orbital AI technologies ([10:50]).

7. Deal Timeline and Process

• Merger talks intensified late last year ([11:28]).
• By early February 2026, signed and closed in days, forming the new $1.25 trillion entity.
• Now: need to sell the new business narrative to Wall Street and the public ahead of IPO ([12:24]).

8. Risks, Rewards, and Skepticism

• Merging equals “complicated” IPO due to culture integration and narrative clarity ([12:24]).
• Unlike typical acquisitions, Musk owns both companies—potential conflicts and skepticism about the deal’s independence ([12:56]).
• Technological synergies (AI data centers in space) are speculative and high-risk:

  “It is a bet that is very much ambitious. Some people would even say...out of this world.” (Jessica Mendoza & Berber Jin, [13:20])

• Some investors are skeptical:

  “They would say it’s just a way for him to save XAI.” (Berber Jin, [13:32])

9. Musk’s Appetite for Risk and Legacy

• Musk is all-in on realizing a multiplanetary human civilization and leading in AI, using every asset in his empire to make it happen ([13:48], [13:59]).
• Episode closes questioning whether Musk is “reckless or...a brilliant genius playing 4D chess while the rest of us are in 3D” (Jessica Mendoza, [14:13]).
• The forthcoming IPO will “be an interesting moment in time...whether he gets rewarded or punished for this acquisition,” and will open up “just how much it costs to train AI models.” (Berber Jin, [14:25])

Notable Quotes & Memorable Moments

• On the merger’s scale:

  “And $1.25 trillion, that's a really, really, really big company.”
  — Jessica Mendoza ([00:31])

• On Musk’s mission:

  “Extend the light of consciousness to the stars, enable the creation of colonies on Mars, and ensure, quote, humanity's multiplanetary future.”
  — Jessica Mendoza, reading Musk’s blog ([03:09])

• On data centers in space:

  “Space is called space for a reason. Laughing EMOJI.”
  — Musk’s blog post, paraphrased by Berber Jin ([03:28])

• Industry perspective:

  “A lot of tech CEOs, including Sam Altman, Sundar Pichai, Jeff Bezos, they've all talked about this idea of building data centers in space...”
  — Berber Jin ([05:14])

• Musk at Davos:

  “Net effect is that the lowest cost place to put AI will be space. And that’ll be true within two years, maybe three, three at the latest.”
  — Elon Musk, via Jessica Mendoza ([05:36])

• On SpaceX investors’ nerves:

  “They’re kind of working through the rationale, right, and trying to buy into Elon’s vision. But there’s definitely more of a nervous and mixed reception amongst the SpaceX investor crowd.”
  — Berber Jin ([09:12])

• On the grand risk:

  “He is really willing to do whatever it takes to win in AI. And it's become clearer than ever that he is willing to leverage the power of other parts of his empire to shore up Xai.”
  — Berber Jin ([13:59])

• Episode’s final question:

  “Is Elon Musk reckless or is he a brilliant genius playing 4D chess while the rest of us are in 3D?”
  — Jessica Mendoza ([14:13])
  “The IPO will really be an interesting moment...we could learn a lot.”
  — Berber Jin ([14:25])

Timestamps for Important Segments

• The Merger Announcement: [00:05]-[00:50]
• Musk’s Vision/Bold Claims: [02:49]-[03:28]
• Data Centers in Space Explained: [03:47]-[04:28]
• Industry Interest/Big Tech: [05:09]-[05:36]
• Financial Challenges for XAI: [06:09]-[06:59]
• Strategic Benefits/Shareholder Views: [07:27]-[09:12]
• What SpaceX Gains: [10:04]-[10:50]
• Deal Process and IPO Complications: [11:28]-[12:56]
• Risk Analysis & Musk’s Appetite for Disruption: [13:20]-[14:25]

Conclusion

This episode offers an in-depth, accessible look at one of the boldest mergers in business history, focusing on Elon Musk’s immense ambition and the untested future of AI in space. Whether Musk is making genius plays for humanity’s future—or just staving off business trouble through empire consolidation—is the question left hanging for listeners and investors alike.