SpaceX Likely to Merge with Elon Musk’s Tesla or xAI: What we Know So Far

Elon Musk’s space exploration venture SpaceX is in talks for a potential merger with either EV manufacturer Tesla or AI start-up xAI, according to reports from Bloomberg and Reuters. The supposed move is reportedly being considered as a sign that the billionaire is considering to consolidate his empire.

Reuters reported that a SpaceX-xAI merger could take place ahead of a planned SpaceX IPO later this year. If executed, the deal would bring together assets including xAI’s Grok chatbot, the X social media platform, Starlink satellites and SpaceX’s rockets under a single corporate structure.

While representatives from SpaceX and xAI have not publicly commented on the possibility, filings reportedly show that two new entities, K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, were incorporated in Nevada on January 21.

One entity lists SpaceX and its chief financial officer, Bret Johnsen, as managing members, while the other names Johnsen as its sole officer, suggesting preparations that could support a merger transaction.

Musk's Cross Company Moves

Musk has a history of combining businesses. In 2016, Tesla acquired SolarCity using stock, and last year X was folded into xAI through a share swap to give the AI startup access to data and distribution. xAI has since raised $20 billion in an upsized Series E funding round this month, exceeding its original target, with continued backing from Musk-led companies.

The potential combinations align with Musk’s recent actions to integrate or share resources across his companies.

Last year, SpaceX agreed to invest $2 billion in xAI, according to The Wall Street Journal. Tesla also reportedly disclosed earlier this week that it has committed $2 billion to the AI start-up. In 2024, xAI acquired X in a deal that Musk said valued xAI at $80 billion and X at $33 billion.

SpaceX was valued at about $800 billion in a recent secondary share sale, making it the most valuable privately held company in the United States. SpaceX could reportedly go public later this year at a valuation exceeding $1 trillion. xAI was valued at $230 billion in November, while Tesla’s market capitalisation currently stands at about $1.4 trillion.