SpaceX has acquired Elon Musk’s artificial intelligence startup, xAI, creating the world’s most valuable private company, the spaceflight company announced Monday.

Musk, who is also the CEO of SpaceX, wrote a memo The rocket company’s website posted that the merger is more about creating space-based data centers — an idea he’s been pushing for the past few months.

“Current advances in AI rely on large terrestrial data centers, which require a lot of energy and cooling. The world’s electricity demand for AI cannot be met by terrestrial solutions, even in the near term, without imposing hardship on communities and the environment,” he wrote. (xAI is accused of impose some of that difficulty in communities near its data centers in Memphis, Tennessee.)

The tie-up values ​​the combined company at $1.25 trillion, according to Bloomberg News, which was first report the completed deal. SpaceX before IS reported prepare an IPO for as early as June this year. It’s unclear if the merger will affect the timeline. Musk did not address the IPO in his public memo.

The merger brings together two of Musk’s companies, each with their own financial challenges. xAI is now burning nearly $1 billion per month, according to Bloomberg. SpaceX, on the other hand, generates up to 80% of its revenue from launching its own Starlink satellites, according to Reuters. Last year, xAI takes Xthe social media company also owned by Musk, with Musk claiming a combined company valuation of $113 billion.

Musk wrote in his memo that it will require a constant flow of many – although he did not specify how many – satellites to make these data centers based in space, ensuring that SpaceX will have a large and constant stream of income for the foreseeable future. (That revenue loop probably looks even better when you consider that satellites are required to be de-orbited every five years by the Federal Communications Commission.)

While data centers in space may be the stated goal, SpaceX and xAI have very different near-term goals.

SpaceX is now trying to prove that its Starship rocket can carry astronauts to the moon and Mars, while xAI competes with leading artificial intelligence companies such as Google and OpenAI. The pressure of xAI is great, the The Washington Post reported on Mondaythat Musk removed restrictions on the company’s chatbot Grok – which contributed to the creation of a tool for creating AI-generated nonconsensual sexual imagery of adults and children.

Musk is also the head of Tesla, The Boring Company, and Neuralink. Tesla and SpaceX previously invested $2 billion each in xAI.