SpaceX‑xAI deal uses tax‑friendly triangular merger to shield liabilities and speed an IPO

Elon Musk arranged a two-step triangular merger that keeps xAI as a SpaceX subsidiary, insulating the parent from xAI’s debts and liabilities while letting xAI shareholders defer taxes through a tax-free reorganization; the deal values xAI at about $250 billion and SpaceX at $1 trillion, avoids triggering debt covenants, and is not expected to derail SpaceX’s planned IPO later this year, though it adds complexity and could affect valuation; it also aims to shield SpaceX from xAI’s potential legal issues surrounding Grok.