🚨 A SpaceX and xAI Merger?
Elon Musk's two most valuable companies may be combining.
SpaceX and xAI are in discussions to merge ahead of SpaceX's planned IPO, according to a Reuters report. The deal would bring together SpaceX's rocket and Starlink satellite operations with xAI's Grok chatbot and AI infrastructure—plus X (formerly Twitter), which xAI acquired last year.
The numbers involved are staggering:
- SpaceX's private markets valuation is ~$850B today, according to data from Caplight
- xAI was valued at ~$80B when it acquired X for $33B in an all stock merger
- Tesla disclosed this week it invested $2B in xAI; SpaceX reportedly invested $2B last year
Corporate filings show two new entities—"K2 Merger Sub Inc." and "K2 Merger Sub 2 LLC"—were established in Nevada on January 21, suggesting formal merger planning is underway.
Why it matters for private markets: A combined SpaceX-xAI entity going public would be an even larger IPO than investors had been anticipating. For secondary market investors, the implications are significant: SpaceX shares have been among the most actively traded private securities, and any merger would require converting existing equity structures. The Financial Times reported Musk is targeting a June IPO—though his timelines have historically been optimistic.
The strategic logic is clear. Musk has said he wants to put AI data centers in space, and combining xAI's compute ambitions with SpaceX's launch capabilities and Starlink infrastructure could make that feasible. Whether regulators would scrutinize the deal—given Musk's government relationships through DOGE—remains an open question.
Read the full story on TechCrunch
Fundraise of the Week
The robotaxi wars are getting crowded—and Uber isn't sitting on the sidelines.
Toronto-based Waabi raised $1 billion this week in what the company calls the largest fundraise in Canadian history. The funding includes a $750 million Series C led by Khosla Ventures and G2 Venture Partners, plus a $250 million milestone-based commitment from Uber tied to deploying at least 25,000 robotaxis on its platform.
The deal marks a significant pivot for Waabi, which has focused primarily on autonomous trucking since its 2021 founding. CEO Raquel Urtasun—who previously led Uber's autonomous vehicle research lab—said the same AI that drives the company's trucks will power its robotaxis. "We build all the capabilities you require for robotaxis already," she told reporters.
Why it matters: Uber has been assembling a portfolio of AV partnerships after shuttering its in-house efforts. The company already works with Waymo, Avride, and others. But the Waabi deal signals a deeper strategic bet: exclusive robotaxi rights, milestone-based investment, and a path to 25,000+ vehicles. It's a hedge against Waymo's direct competition—and a bet that simulation-first AI can scale faster than competitors burning cash on real-world testing.
The timing is notable. Waymo is expanding aggressively across the U.S. and planning launches in London and Tokyo. Tesla's robotaxi service in Austin has moved to some fully driverless rides. The window for new entrants is narrowing.
Funding Pulse
Other notable raises in the private markets:
Cellares: $257M at IPO-track valuation (Series D) The cell therapy manufacturing startup raised from BlackRock and Eclipse to scale its automated "Smart Factory" operations. Cellares claims its platform delivers up to 10x higher throughput than conventional manufacturing at lower cost. The company has a $380M manufacturing agreement with Bristol Myers Squibb and expects to support commercial-scale production by 2027—with an IPO potentially following in Q4.
Read the full story on BioSpace
PaleBlueDot AI: $150M at $1B+ valuation (Series B) The "neocloud" startup hit unicorn status in a round led by B Capital. PaleBlueDot operates a marketplace connecting AI workloads with GPU capacity across the U.S. and Asia—an alternative to hyperscalers like AWS and Azure. Among its clients: an overseas entity of Xiaohongshu (RedNote), highlighting how Chinese tech companies are navigating U.S. chip restrictions.
Read the full story on Reuters
Northwood Space: $100M + $49.8M Space Force contract (Series B) Bridgit Mendler's satellite ground infrastructure startup raised from Washington Harbour Partners and Andreessen Horowitz, then announced a contract to upgrade the U.S. military's Satellite Control Network. The company plans to expand capacity so each ground station can handle 10-12 satellite links by 2027, up from eight today.
Read the full story on TechCrunch
Genspark lands $300M to launch "AI Workspace 2.0" — The AI productivity platform adds voice-to-text and workflow automation. Total funding now exceeds $460M.
Read the full story on Techstartups
Quick Takes
OpenAI's Kevin Weil: "2026 will be for AI and science what 2025 was for AI in software engineering" — The head of OpenAI's new science team says 1.3M researchers now query ChatGPT weekly on "advanced topics." Whether that translates to actual discoveries remains the open question.
GPT-5.2 reportedly scores 92% on doctoral-level science benchmarks — Up from GPT-4's 39%. Whether benchmark performance translates to real discovery remains the open question.
Tesla's Austin robotaxi service moves to some fully driverless rides — The company launched with safety monitors last June. Another entrant in an increasingly crowded field.
📊 Data Point of the Day
$1.5 billion
Total funding raised by Waabi to date—including this week's $1B round. The company claims its simulation-first approach means it needs less capital than competitors to scale. "One billion of new capital for Waabi is an infinite amount of capital," CEO Raquel Urtasun said. That's a bet worth watching.
📖 Manual
Neocloud
A class of cloud infrastructure providers that specialize in AI workloads rather than general-purpose computing. Unlike hyperscalers (AWS, Azure, Google Cloud), neoclouds focus on GPU access, inference optimization, and training infrastructure. Examples include CoreWeave, Lambda Labs, and now PaleBlueDot. The category has grown rapidly as AI companies seek alternatives to hyperscaler pricing and availability constraints.
What We're Watching
- SpaceX-xAI merger timeline — If the deal proceeds, it would reshape the private markets landscape. Watch for SEC filings, shareholder communications, and whether the June IPO target holds.
- Robotaxi consolidation — With Waymo, Tesla, Waabi, and others all scaling, 2026 may determine which architectures (simulation-first, real-world training, vision-only) actually work at scale.
- Neocloud economics — CoreWeave's performance in the public markets is setting the tone for how investors value GPU infrastructure plays. PaleBlueDot's unicorn status suggests appetite remains strong.
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