Luke Vargas

Our Yoko Kubota is in Beijing.

And that's it for What's News for this Wednesday morning.

Today's show was produced by Hattie Moyer and Daniel Bach.

Our supervising producer is Sandra Kilhoff.

And I'm Luke Vargas for The Wall Street Journal.

We will be back tonight with a new show.

Until then, thanks for listening.

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 $1.25 trillion 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 Gin explains, the move was unexpected, as industry observers had anticipated that XAI would merge with Tesla instead.

Berber added that he'll be looking to see how investors like this combination and whether they buy into Musk's long-term vision for the new company.

previously invested $2 billion into XAI.

And last week, Tesla committed to invest the same amount in the company.