US space stocks rise after Elon Musk merged SpaceX, xAI at $1.25 trillion valuation

n a surprising bid to expand its artificial intelligence (AI) operations to space, tech billionaire Elon Musk has merged SpaceX with xAI, leading to a huge rise in the US space stocks on Tuesday.

Promising US space stocks for today after SpaceX, xAI merger

In premarket trading, shares of Rocket Lab and Planet Labs increased by approximately 3%, while AST SpaceMobile and Globalstar saw gains of 2.4% and 1.3%, respectively. Intuitive Machines rose by 2.1%, and Redwire surged by 4.9%.

The integration of xAI into SpaceX reportedly makes a staggering combined valuation of $1.25 trillion, signifying a valuable step towards expanding AI beyond Earth.

Touting the merger, Musk stated that space offers the most cost-effective method for generating AI computing power within the next two to three years. 

The move appears to be promising as prominent tech giants are striving for artificial general intelligence, a theoretical goal where machines could outperform human intelligence.

Musk described the merger as an effort to create a vertically integrated powerhouse that combines AI, rocket technology, space-based internet services, direct-to-mobile communications, and a platform for real-time information and free speech. 

Investment director Russ Mould from AJ Bell noted that this ambitious vision could pave the way for what might be the largest IPO in history.

The merger unites two of the largest privately held companies globally, with SpaceX reportedly planning a blockbuster public offering this year that could value it at over $1.5 trillion. 

As global investment in space technology continues to rise, driven by government spending and private sector initiatives, the importance of space as a foundation for future AI advancements is becoming increasingly clear.