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Welcome back! Before we get into today’s news, check out a string of scoops from my colleague Sri on the rivalry between OpenAI and Anthropic. OpenAI, she reported last night, is talking to Nvidia, Amazon, Microsoft about raising up to $60 billion to fill out its $100 billion fundraising, which would widen its funding lead over rival Anthropic. But Anthropic is narrowing the gap when it comes to another important metric—revenue. Sri has the lowdown on Anthropic projections through 2029, including the new date it starts generating cash (and presumably would need less investor money!) Now, onto the latest endeavor of the world’s richest man. Ever since I broke the news in December that SpaceX was planning an initial public offering this year, it has remained a top news story, with every little half-thought about the company’s upcoming public debut generating headlines. But today’s latest development is actually significant. Reuters reported what many people have speculated might happen: that SpaceX is in talks to merge with xAI before the IPO. This is both surprising and unsurprising. It’s surprising in the sense that it is a particularly large acquisition for SpaceX to make just months before it goes public (xAI was recently valued at $230 billion in a fundraising). As my colleague Cory Weinberg noted, that’s a lot of last-minute paperwork. And yet it has often been predicted because it’s exactly the kind of thing Musk likes to do. Last year he merged X (formerly Twitter) with xAI. Why does Musk combine his companies? It’s not because he wants one fewer company to manage. It’s because it can be beneficial to his shareholders. Musk likes to reward people who are loyal to him, and he doesn’t want them to lose money. Investors including Sequoia Capital, Andreessen Horowitz and Valor Equity Partners collectively poured billions into Musk’s leveraged buyout of Twitter at a $44 billion valuation. For a while, as Twitter’s ad revenue tanked, some large investors (and Musk himself) slashed the paper valuation of the company. But investors were made whole, at least on paper, when they received xAI shares at a valuation on par with X’s take-private price of $44 billion. Now xAI investors will get shares in SpaceX, a valuable and rapidly growing company. Plus there are synergies. Musk has recently been positioning SpaceX as AI related, as he and others talk up the benefits of putting data centers in space, because of the free, uninterrupted solar power and cooling that environment would provide. And it’s a way to take a capital-intensive business like xAI public and get that stock market cash. Will it slow down the IPO prep? It’s certainly possible. While we’re hearing that Musk is aiming to take the company public this summer, a $200 billion–plus acquisition doesn’t happen overnight. But the world’s richest man can use his financial clout to make things happen faster than what’s typical, especially given SpaceX’s recent $800 billion valuation. There will certainly be no shortage of lawyers, bankers and consultants preparing for what could be the biggest IPO in history. | 
