xAI went from a $3.5B seed valuation in November 2023 to $250B in under 30 months — one of the fastest value-creation stories in private market history. In February 2026, Elon Musk merged xAI into SpaceX, combining the two companies into a single entity valued at approximately $1.25 trillion.
The final standalone valuation
xAI's last independent financing was a Series E in January 2026 at a $230B post-money valuation, raising $20B. Just weeks later, the company was folded into SpaceX. The implied xAI valuation in the merger was approximately $250B — a modest step-up from the Series E.
What legacy xAI employees now hold
If you were an xAI employee, your equity was converted into SpaceX equity as part of the merger. The conversion ratio reflected xAI's share of the combined $1.25T valuation — approximately 20%. Your xAI grants are now SpaceX grants, governed by SpaceX's equity documents and subject to its tender offer schedule.
Strike prices by original cohort
- 2023 cohort (founding team): strikes $4–$8. Now SpaceX shares at xAI's implied conversion value.
- 2024 H1 cohort (Series B era): strikes $35–$60. Significant appreciation captured in the conversion.
- 2025 cohort (post-Series C): strikes $75+. Still in-the-money at the merger valuation.
Tax treatment of the merger conversion
A stock-for-stock merger is typically structured as a non-taxable exchange — meaning your xAI options or shares convert into SpaceX equity without triggering a taxable event at the time of conversion. However, your holding period and original grant terms carry over. Verify this with a tax advisor based on your specific grant documentation.
If you held xAI options and they converted to SpaceX equity, your AMT exposure clock may have reset. Early xAI employees with large in-the-money positions should consult a tax advisor before participating in any SpaceX tender.