Musk Explores Unprecedented Merger: SpaceX and xAI Could Combine Forces, Reports Say
In a strategic maneuver that could blur the lines between the final frontier and cutting-edge artificial intelligence, Elon Musk is moving forward with plans to merge SpaceX and xAI, The Wall Street Journal reported Monday. The proposal, which has been floated to some investors, signals a deepening integration of Musk's sprawling technological empire.
Citing people familiar with the matter, the Journal noted that a merger could provide xAI with access to the substantial financial resources of SpaceX. The aerospace leader, alongside Musk's electric vehicle maker Tesla, has already committed a combined $4 billion to xAI across recent funding rounds.
The private status of both SpaceX and xAI is seen as a factor that could streamline a potential combination. Discussions have also reportedly touched on the possibility of involving Tesla, though those talks remain preliminary.
Strategic Synergies and Mounting Scrutiny
The potential merger arrives as xAI, the developer of the Grok chatbot, faces its own challenges. Positioned as a competitor to OpenAI's ChatGPT, Grok recently drew regulatory attention and was forced to restrict certain image-generation capabilities after concerns were raised about its use to create suggestive imagery of women.
Analysts suggest the merger logic extends beyond capital. Combining SpaceX's satellite infrastructure and ambitious projects—like future space-based data centers—with xAI's AI capabilities could create unique synergies, aligning with Musk's long-term vision for a multiplanetary, AI-integrated future. The social media platform X, formerly Twitter, is already a part of the xAI ecosystem.
The move comes amid speculation of a potential SpaceX initial public offering that could value the company at a staggering $1.5 trillion. Musk currently holds an estimated 40% stake in both SpaceX and xAI.
Industry Reaction
"This is a logical, if bold, consolidation," said David Chen, a venture capitalist at Stellar Capital. "Musk is essentially creating a vertically integrated tech behemoth. The capital from SpaceX's successful launch business could accelerate xAI's R&D at a critical time in the AI race."
"It's a desperate shell game to prop up his lagging AI project," countered Maya Rodriguez, a tech policy analyst at the Future Ethics Institute. "He's draining resources from a national asset like SpaceX to fund Grok, which is already mired in controversy. This raises serious governance questions and prioritizes hype over SpaceX's core mission."
"The space-AI convergence theory is fascinating," added Arjun Patel, a senior aerospace engineer. "If the goal is to process vast amounts of spatial data or manage autonomous systems beyond Earth, this partnership makes profound technical sense."