According to a recent report from Bloomberg, Elon Musk is actively contemplating a merger between SpaceX and Tesla or between SpaceX and xAI, which owns X (formerly Twitter). There is also the possibility of a three-way merger involving all three companies.
Bloomberg reports that Reuters has added that a potential merger between SpaceX and xAI could involve a 1:1 stock exchange of xAI shares for SpaceX shares. Notably, SpaceX anticipates going public in mid-2026, potentially surpassing a valuation of $1 trillion.
While a merger between the privately-owned SpaceX and xAI might seem manageable, a merger with Tesla could understandably concern its investors.
In 2016, Tesla acquired SolarCity, and in 2025, xAI absorbed X (Twitter). Just last week, xAI received a $2 billion investment from Tesla, further intertwining these entities.
Elon Musk holds significant stakes in both xAI and SpaceX and serves as Tesla's CEO, leading to a potential conflict of interest as he will have to negotiate the deal details largely with himself.
Musk is expected to assign equal value to all three companies, each with its unique attributes. Tesla faces declining sales, SpaceX boasts lucrative government contracts and Starlink, while xAI struggles financially, attempting to compete with giants like Google and OpenAI in the AI sector.
A merger with Tesla could enable Musk to exert greater control over the company while addressing the concerns of xAI investors, who were discontented when he opted to merge X/Twitter with xAI following Twitter's significant devaluation.
Interestingly, Tesla's CEO has recently announced plans to halt Model S and Model X production at the Fremont facility to focus on producing the Optimus robot, which is likely to utilize xAI's technology. This move raises questions about the direction of these companies.
However, it's important to remember that these discussions are still speculative, and Tesla investors should remain vigilant.
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