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Elon Musk reshapes his tech empire as SpaceX acquires XAI.

Plus, the Epstein scandal sends shockwaves across the Atlantic,

and the House prepares to vote as soon as today to end a partial government shutdown.

We have a one-vote margin now, so what could go wrong? That's fine.

It's Tuesday, February 3rd.

I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

We begin with a major tie-up as SpaceX is buying XAI, a deal that brings together Elon Musk's well-established rocket business and his AI startup to form a one-and-a-quarter

trillion-dollar company. The merger was confirmed in a memo yesterday by Musk, saying the deal

will, quote, form the most ambitious, vertically integrated innovation engine on and off-earth.

But as journal tech reporter Berber Jin explains, the move was unexpected, as industry

observers had anticipated that XAI would merge with Tesla instead. We've reported that SpaceX is

looking to go public as soon as the middle of this year. And this merger definitely throws a little

bit of a curveball in those ambitions, because SpaceX on its own is a profitable business.

And XAI, on the other hand, doesn't generate a lot of revenue, but it burns through billions

of dollars every year on computing costs.

So by merging the two companies together, he's essentially taking a very money-losing cash-intensive

business and pairing it with SpaceX. Berber added that he'll be looking

to see how investors like this combination and whether they buy in to Musk's long-term vision for the

...