Elon Musk is reportedly exploring ways to consolidate his business empire, with SpaceX considering a potential merger with either Tesla or his artificial intelligence startup, xAI.
According to Bloomberg, discussions are in the early stages, and no final decisions have been made. While SpaceX is preparing for a possible IPO later this year, some investors are reportedly pushing for a merger with Tesla, which would combine the leading private space company with the publicly traded electric vehicle giant.
Alternatively, SpaceX is considering a tie-up with xAI, potentially exchanging xAI shares for SpaceX stock. Documents filed in Nevada this month revealed the creation of two new corporate entities, listing SpaceX CFO Bret Johnsen as an executive, which could facilitate such a transaction.
Musk’s consolidation plans appear to align with his vision for orbital computing. At the World Economic Forum in Davos, he suggested space could be the “lowest-cost place to put AI” thanks to abundant solar energy. A merger could leverage Tesla’s energy storage expertise and SpaceX’s Starlink infrastructure to support xAI’s “Grok” AI model in orbit.
The news immediately moved markets, with Tesla shares rising as much as 4.5% in after-hours trading. Analysts say any deal would likely attract interest from infrastructure funds and Middle Eastern sovereign wealth funds, though it would face heavy regulatory scrutiny due to Musk’s overlapping leadership roles.
Dennis Dick, chief market strategist at Stock Trader Network, said, “Musk has too many separate companies. A major risk thesis for Tesla is that Musk is spreading himself too thin. As a Tesla shareholder, I applaud further consolidation.”
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