A single Musk megacompany? SpaceX, Tesla, and xAI could be heading for a merger

Elon Musk is said to be looking at changes in how his companies are structured. Reports from Bloomberg and Reuters say early discussions are taking place around a possible merger involving SpaceX, Tesla, and xAI. The talks are said to be at an early stage, and no final structure has been decided yet. Also Read: Neuralink’s vision implant is almost ready: What the first human trial could look like

What the talks reportedly involve

Bloomberg reports that one option being discusses is a merger between SpaceX and Tesla. Another possibility is a combination of SpaceX and xAI, which already owns Musk’s social media platform X. Sources cited in the report say these are exploratory discussions, with multiple scenarios being considered rather than a single confirmed plan. Also Read: OpenAI may be building a social network where bots aren’t welcome

Reuters adds that a SpaceX-xAI merger could happen ahead of a potential SpaceX public listing later this year. If that route is taken, it would bring together businesses spanning rockets, satellites, artificial intelligence, and social media under one corporate umbrella. Also Read: AI “Nudify” apps are still slipping through Google and Apple’s app stores, says report

Signs behind the scenes

While none of the companies have commented publicly, recent filings have added to the speculation. Two new entities, named K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, were reportedly registered in Nevada on January 21. These are typically set up during early planning stages. This does not confirm that a deal is happening, but it suggests preparations are being explored.

Why a merger could make sense

Each of the possible combinations serves a different purpose. A SpaceX and xAI tie-up could support Musk’s stated interest in placing data centres in space, potentially using Starlink satellites and SpaceX infrastructure. A SpaceX-Tesla merger could also align Tesla’s energy storage and power systems with future space-based data centre plans.

These discussions also fit into Musk’s pattern of closer cooperation between his companies. According to The Wall Street Journal, SpaceX invested $2 billion in xAI last year. Tesla also disclosed earlier this week that it has invested $2 billion in the AI startup.

Recent valuations and IPO talks

xAI acquired X last year in deal Musk said valued xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, was recently valued at around $800 billion following a secondary share sale, making it one of the most valuable private companies in the US.

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A report by Financial Times recently suggested Musk is considering taking SpaceX public as early as June. For now, the merger has not been finalised. The talks are still at an early stage, and no official announcement has been made by any of the companies involved.