Good morning. Andrew here. The biggest merger in history, with an asterisk, just happened: SpaceX has acquired xAI to create a $1.25 trillion giant. It’s an all-stock deal — and the stock is private (and privately valued, hence the asterisk), though SpaceX plans to go public later this year. All this was orchestrated by one person, Elon Musk, who controls both firms. It would make SpaceX a vertically integrated company for putting data centers in space and then using them for artificial intelligence services. There are questions about whether SpaceX needs xAI and about whether it complicates the SpaceX I.P.O. story, but it certainly helps Musk’s investors in xAI (some of whom previously invested in the social media site X, which xAI acquired). There’s also a long-term antitrust question: If data centers in space become a reality — if and Musk has a near-monopoly on them — would other A.I. model makers be able to use them? More below. (Was this newsletter forwarded to you? Sign up here.)
The big questions about Musk’s big dealElon Musk had a busy Monday, combining his SpaceX rocket company and his xAI artificial intelligence start-up to create the world’s most valuable private enterprise,. Musk described the merged company as “the most ambitious, vertically integrated innovation engine on (and off) Earth.” The deal transpired before a long-planned I.P.O. for SpaceX that could happen this summer. But investors and others are raising questions about what the merger actually accomplishes, especially for SpaceX, which was already riding high and now has a more complicated story to sell to investors. The details: The deal valued SpaceX at about $1 trillion, up from the roughly $800 billion cited in December; xAI was valued at $250 billion, slightly up from its last fund-raising round. (The move required SpaceX to issue about $250 billion of new stock, drastically diluting the stakes of existing investors.) Musk argues that the combined company will be better able to set up space-based A.I. data centers, which in theory can transcend the limitations on power use and physical land needs of Earth-based ones. “In the long term, space-based A.I. is obviously the only way to scale,” Musk wrote in a memo to employees that SpaceX also issued publicly. The optimist case: The combined company makes SpaceX “a lot more attractive” to investors because it eliminates distractions for Musk, Andrew Rocco, a strategist at Zacks Investment Research, told DealBook. SpaceX, which reportedly earned about $8 billion on more than $15 billion in revenue last year, could funnel cash to the money-losing xAI, which has already raised $42 billion from investors since its founding in 2023, according to Pitchbook. (Bloomberg previously reported that xAI was burning through about $1 billion a month.) There are concerns, too:
Michael Sobel, an investor whose firm buys secondary stakes in privately held companies, told The Information that he has heard from SpaceX shareholders who have some questions about the deal. Many are open to its logic and trust Musk, he said, “but they’re like, ‘Hmmm.’”
President Trump announces a multibillion-dollar stockpile of strategic critical minerals. The $12 billion initiative, known as “Project Vault,” would involve buying and storing minerals for American manufacturers to reduce reliance on China, Trump said at the White House. The stockpile, which he likened to oil reserves, would be financed by $1.7 billion in private funds and a $10 billion loan from the U.S. Export-Import Bank. General Motors, Stellantis, Boeing and Google are involved. India reaches a long-awaited trade deal with the U.S. Trump and India’s prime minister, Narendra Modi, each announced on social media that they had reached an agreement to lower American tariffs on Indian goods to 18 percent, from 50 percent, though details were scarce. Trump said that India would drop its tariffs on some U.S. goods, buy $500 billion in American products and stop buying Russian oil, none of which Modi mentioned. Separately, The Financial Times reports that Japan will announce three deals — part of its commitment to invest $550 billion in the U.S. — soon after the Asian country’s elections next week. Trump says he is seeking $1 billion from Harvard University. The president made his claim hours after The Times reported that his administration had dropped its demand that the university pay $200 million to settle the government’s allegations that Harvard had mishandled antisemitism on campus. Some figures tied to Harvard told The Times that the school might still need to cut a deal, but others expressed worry that anything seen as aiding Trump would cause a backlash. Palantir posts a blockbuster quarter. The data company reported about $1.41 billion in revenue for the last three months of 2025, a 70 percent year-over-year gain, and forecast revenues for 2026 that topped Wall Street expectations. Palantir’s revenue has skyrocketed during the Trump administration as it has signed large contracts with the government — including with ICE, for whom its software helps find and track immigrants — and as it has benefited from the artificial intelligence boom. More on the costs of the A.I. raceSpaceX’s union with xAI has underscored a hard reality about the artificial intelligence industry: developing the technology is still really challenging — and expensive. While xAI will now benefit from SpaceX’s healthy cash flows, other players in A.I. are still having to raise lots of money. Here’s the latest. Oracle: Larry Ellison’s tech giant sold $25 billion of bonds yesterday, despite investors being concerned about how much debt the company had already taken on to fund its A.I. ambitions. But Oracle appeared to allay investor concerns by pledging to keep its spending in check to maintain an investment-grade credit rating. (The company’s stock is down nearly 50 percent since September as shareholders have begun to worry about the scale of its A.I. infrastructure commitments.) OpenAI and Nvidia: Shares in Nvidia, the chipmaker at the heart of the A.I. boom, fell nearly 3 percent yesterday on reported tensions between the company and OpenAI, one of its biggest customers. The Wall Street Journal had reported, citing unnamed sources, that a $100 billion pledge by Nvidia to invest in OpenAI had stalled amid concerns about OpenAI’s business strategy. Then, yesterday, Reuters reported, citing unnamed sources, that OpenAI had been unhappy with the performance of Nvidia processors for “inference,” the part of A.I. work flow that involves answering user queries. OpenAI had been in talks with companies such as Cerebras and Groq for its needs, Reuters added. Together, the reports suggest a fissure behind one of the most important bonds in the A.I. industry and raise questions about how OpenAI would meet its funding and chip needs. Leaders of both companies have sought to play down any perception of friction. Jensen Huang, Nvidia’s C.E.O., said over the weekend that his company still planned to make a big investment. And Sam Altman, OpenAI’s chief, posted on social media, “We love working with NVIDIA” and planned to be a customer for a long time. He added, “I don’t get where all this insanity is coming from.” “Silver is always a death trap.”— Rhona O’Connell, an analyst at the financial services firm StoneX, on the precious metal’s sudden plunge in recent days after it had reached a record $120 an ounce. Retail investors poured $1 billion into silver-focused index funds in January. More fallout from the latest Epstein filesThe Justice Department’s release on Friday of millions of files related to Jeffrey Epstein shed more light on the web of relationships that the convicted sex offender cultivated with prominent names in business, politics, academia and beyond. It has also increased scrutiny of some of those implicated in the latest disclosures. Steve Tisch: Roger Goodell, the N.F.L. commissioner, said that the league would examine the relationship between Tisch, who is co-owner of the N.F.L.’s New York Giants, and Epstein after Tisch’s name appeared in the files. Among their interactions, Epstein and Tisch discussed women in vulgar terms. “As we all know now, he was a terrible person and someone I deeply regret associating with,” Tisch said in a statement on Friday, referring to Epstein. Goodell told reporters yesterday, “Absolutely we will look at all the facts.” Kathy Ruemmler: Epstein coached Ruemmler, now Goldman Sachs’ general counsel, as she pursued a senior job at Facebook in 2018 and 2019. He drafted messages to Sheryl Sandberg, who was then Facebook’s C.O.O., and lobbied the former Treasury secretary Larry Summers, who was Sandberg’s mentor, on Ruemmler’s behalf. “I had no knowledge of any ongoing criminal conduct on his part, and I did not know him as the monster he has been revealed to be,” Ruemmler said in a statement to The Financial Times. Peter Attia: The physician and longevity influencer’s name appears in more than 1,700 of the released documents, including direct correspondence with Epstein that features crude commentary on women’s bodies. In an extensive social media post on Monday, Attia explained himself as being star-struck in Epstein’s presence. “At that point in my career, I had little exposure to prominent people, and that level of access was novel to me,” Attia wrote. “What I wrote in that email reads terribly, and I own that.” Jes Staley: An infamous email from Staley, former C.E.O. of Barclays, to Epstein that included the line, “That was fun. Say hi to Snow White,” returned to the forefront. The newly released files showed that Epstein had asked an unidentified woman to buy a Snow White costume just weeks earlier. “I honest to God, when I went through the emails I have no idea what this refers to. I have no idea who Snow White is,” Staley testified in court last year during his effort to overturn a lifetime ban on being a senior manager in the British financial services industry. Steven Sinofsky: The former president of the Windows Division at Microsoft sought Epstein’s advice as he negotiated his sudden departure from the software giant in 2012. After Microsoft wired Sinofsky funds for his reported $14 million exit package in 2013, Sinofsky wrote to Epstein, “Got paid. You will be too :)” Sinofsky declined to comment when contacted by The Verge. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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