Elon Musk’s SpaceX, Tesla and xAI in early talks over potential merger: Reports

Three companies controlled by Elon Musk — SpaceX, Tesla and xAI — are in discussions over a potential merger, according to reports by Bloomberg and Reuters, with talks said to be at an early stage and no final structure decided.

Bloomberg reported, citing unnamed insiders, that one scenario under consideration would involve a merger between SpaceX and Tesla. Another option being examined would see SpaceX combine with xAI, the artificial intelligence company that already owns Musk’s social media platform X.

Reuters reported that a merger between SpaceX and xAI could take place ahead of a planned SpaceX initial public offering later this year. Such a combination would bring together xAI’s Grok chatbot, the X platform, SpaceX’s rocket business and Starlink satellite operations under a single corporate entity.

Company representatives from SpaceX and xAI have not commented publicly on the discussions. However, recent regulatory filings show that two new corporate entities, K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, were incorporated in Nevada on January 21, indicating that multiple merger structures may be under consideration.

Each potential combination carries strategic advantages. A SpaceX–xAI merger could enable the AI firm to deploy data centre infrastructure in space, an idea Musk has previously spoken about. A SpaceX–Tesla merger could align Tesla’s energy storage and power solutions with space-based data centre ambitions.

Both scenarios, as well as the possibility of integrating all three companies, reflect Musk’s broader efforts to consolidate operations or share resources across his business empire. According to The Wall Street Journal, SpaceX agreed last year to invest $2 billion in xAI. Earlier this week, Tesla disclosed that it had also invested $2 billion in the AI company.

In 2025, xAI acquired X in a transaction Musk said valued xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, has reportedly conducted a secondary share sale valuing the company at $800 billion, making it the most valuable private company in the United States.

Separately, the Financial Times reported recently that Musk is aiming to take SpaceX public as early as June this year.