Musk Weighs Unifying Empire: SpaceX in Talks for Potential Mergers with Tesla or xAI
(Bloomberg) -- Elon Musk is contemplating a radical consolidation of his corporate empire, with SpaceX actively evaluating potential mergers with either electric vehicle giant Tesla Inc. or his artificial intelligence firm xAI, according to people familiar with the deliberations.
The discussions, which remain preliminary, highlight Musk's ongoing effort to synergize his flagship companies. Some investors are reportedly advocating for a SpaceX-Tesla combination, viewing it as a way to deeply integrate Tesla's energy storage and manufacturing prowess with SpaceX's aerospace ambitions. Concurrently, a separate track explores merging SpaceX with xAI, a move seen as potentially supercharging the AI startup's capabilities ahead of its own anticipated initial public offering.
"This isn't just about financial engineering; it's about operational symbiosis," said David Chen, a portfolio manager at Astra Capital. "A merger with Tesla could create an integrated energy-to-space infrastructure player. With xAI, it's about building an AI powerhouse with unprecedented computing resources, potentially even in orbit."
Any such transaction would likely attract massive interest from infrastructure funds and sovereign wealth investors, particularly in the Middle East, and could involve significant financing, the people said. The talks come at a critical juncture, as SpaceX targets a historic IPO as soon as June that could value the company at around $1.5 trillion.
Tesla shares surged as much as 5.6% on Friday following the news, adding billions to its market valuation. Neither Musk nor representatives for SpaceX, Tesla, or xAI responded to requests for comment.
Strategic Synergies and Grand Vision
The merger scenarios align with Musk's long-stated vision of interconnected technology loops. Combining with xAI could provide the AI firm with vast computing capacity, potentially leveraging future SpaceX orbital data centers. A tie-up with Tesla, meanwhile, could facilitate Musk's ambitions of using Tesla's energy storage systems to power space-based operations and even transport Tesla's Optimus robots to the moon and Mars aboard SpaceX's Starship.
"This is a classic Musk move—blurring lines to accelerate his sci-fi roadmap," commented Anya Sharma, a tech industry analyst. "The financial and regulatory complexity would be staggering, but the strategic logic from his perspective is clear: create a unified stack from energy and manufacturing on Earth to computing and transport in space."
The financial linkages are already deepening. Tesla recently committed a $2 billion investment into xAI, following a similar-sized commitment from SpaceX, providing crucial capital for the AI firm's rapid burn rate.
IPO Implications and Legal Hints
A merger with either company could reshape or delay SpaceX's blockbuster IPO plans. The listing, potentially the largest ever, is being orchestrated by Wall Street's top banks, with Robinhood Markets Inc. also vying for a role to tap retail investor interest.
Nevada business records show two entities with "merger sub" in their names were established in January, listing SpaceX CFO Bret Johnsen as an officer—a possible administrative precursor to deal-making. Johnsen has previously told employees an IPO would fund an "insane flight rate" for Starship and lunar ambitions.
Reuters first reported the SpaceX-xAI merger talks, noting a potential stock-swap structure. The report added that some xAI executives might have the option to receive cash instead of SpaceX shares in a deal.
"It's corporate megalomania disguised as strategy," argued Marcus Thorne, a vocal critic and editor at The Fintech Skeptic. "Merging these cash-hungry, regulatory-lightning-rod companies would create a behemoth so complex and risk-laden it would make the old conglomerates look simple. Investors should be terrified, not excited."
No final decisions have been made, and all options, including maintaining the status quo, remain on the table. The coming months will determine whether Musk chooses to further intertwine his most ambitious ventures.
--With assistance from Ryan Gould and Kara Carlson.
©2026 Bloomberg L.P.