SpaceX is exploring potential mergers with Tesla Inc or artificial intelligence startup xAI, as Elon Musk considers ways to consolidate his growing business empire.The aerospace company has held internal talks about the feasibility of a SpaceX–Tesla merger, an idea that some investors are actively encouraging, reported Bloomberg, citing sources. Separately, SpaceX is also evaluating a possible combination with xAI ahead of a potential initial public offering.No final decisions have been made, and the details of any transaction could still change. Any merger involving SpaceX could draw strong interest from infrastructure funds and Middle Eastern sovereign wealth funds, according to people familiar with the matter. One source noted that a deal could also require a significant financing component.Different merger structures could support Musk’s broader vision for SpaceX, including placing data centers in orbit to handle advanced artificial intelligence computing.
Space-based data centers and AI strategy
A merger between SpaceX and xAI could allow the AI company to leverage space-based computing capacity, if the technical challenges can be overcome. SpaceX has discussed the possibility of using satellites and orbital infrastructure to support large-scale AI workloads.Tesla could also play a role in this strategy. The electric vehicle maker’s energy storage systems may help power space-based data centers using solar energy. Musk has additionally discussed using SpaceX’s Starship rockets to transport Tesla’s Optimus humanoid robots to the Moon and Mars.Following reports of the potential merger discussions, Tesla shares rose as much as 4.5% in after-hours trading on Thursday. The stock had declined 3.5% during regular trading, leaving Tesla with a market capitalization of approximately $1.56 trillion.Bloomberg News has previously reported that SpaceX is targeting an IPO valuation of around $1.5 trillion, potentially placing it among the most valuable companies in the world.According to Nevada business records, two legal entities containing the phrase “merger sub” were formed on January 21. Both entities list SpaceX Chief Financial Officer Bret Johnsen as an officer, a move often associated with merger preparations.Reuters previously reported on a potential SpaceX–xAI merger, under which xAI shares would be exchanged for SpaceX stock. Some xAI executives may be offered cash in lieu of equity, according to people familiar with the proposal.
SpaceX IPO could be largest in history
SpaceX is considering a public listing as early as June, around Elon Musk’s birthday, and could seek to raise up to $50 billion, sources have said. If completed, the offering would be the largest IPO in history.Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are expected to serve as lead underwriters. Robinhood Markets is also seeking a role in the IPO, Bloomberg News reported.In December, CFO Bret Johnsen told employees that a SpaceX IPO would help fund an “insane flight rate” for the company’s Starship rocket and support plans for a permanent Moon base.
