Mr Elon Musk plans to merge SpaceX with xAI, according to people familiar with the matter, in a deal that encompasses the billionaire’s increasingly costly ambitions to dominate artificial intelligence and space exploration.

The deal was announced in a memo on Feb 2, the people said, asking not to be identified as the information isn’t public. The combined company is expected to price the shares at about US$527 (S$669) each, and would have a valuation of US$1.25 trillion, some of the people said.