Elon Musk's SpaceX and xAI are reportedly considering merging with Tesla ahead of a major IPO
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Multiple media outlets have reported that Elon Musk's SpaceX is considering merging with his artificial intelligence company, xAI, and electric vehicle manufacturer, Tesla. According to Reuters, SpaceX is in talks to merge with xAI ahead of an initial public offering (IPO) planned for sometime in 2026. However, the terms, timing, and structure of the transaction remain fluid, and no final agreement has been reached at this time.
Exclusive: Musk's SpaceX in merger talks with xAI ahead of planned IPO, source says | Reuters
https://www.reuters.com/world/musks-spacex-merger-talks-with-xai-ahead-planned-ipo-source-says-2026-01-29/
Elon Musk's SpaceX Is Said to Consider Merger With Tesla or xAI - Bloomberg
https://www.bloomberg.com/news/articles/2026-01-29/elon-musk-s-spacex-is-said-to-consider-merger-with-tesla-or-xai
SpaceX weighs June IPO timed to planetary alignment and Elon Musk's birthday
https://www.ft.com/content/0ee356cb-5c77-4686-9392-260520369122
Elon Musk's SpaceX, Tesla, and xAI in talks to merge, according to reports | TechCrunch
https://techcrunch.com/2026/01/29/elon-musks-spacex-tesla-and-xai-in-talks-to-merge-according-to-reports/
Elon Musk might merge SpaceX with Tesla or xAI | The Verge
https://www.theverge.com/2026/1/29/24354015/elon-musk-spacex-xai-tesla-merger-talks-report
X already became part of xAI through a stock swap in 2025 , and xAI now owns the X platform. The reported plan envisions exchanging xAI shares for SpaceX shares, which would consolidate launch operations using Falcon 9 and other vehicles, Starlink management and operation, X management and operation, and Grok development under one giant corporation. Meanwhile, Reuters reports that some xAI executives may be offered the option of receiving cash instead of SpaceX shares.
The main purpose of the merger is to accelerate Musk's vision of building data centers in space. Musk has stated that space, where solar energy is available, could be the cheapest place to operate AI, and in 2024 he said, 'Space data centers could become a reality within two to three years at the latest.'
Elon Musk's AI company 'xAI' plans to expand its data center, with the number of high-performance chips reaching 1 million - GIGAZINE
However, Reuters reports that some are questioning whether the additional costs of adapting systems for space are justified, given the rapid and unpredictable changes in AI investments. The report also notes that in the competitive environment, Jeff Bezos' Blue Origin has announced a high-capacity satellite backbone network, and Google is researching space data centers.
Some analysts also believe this integration will be advantageous for contracts with the U.S. Department of Defense, which is rapidly introducing AI into military networks. Reuters reported that the Department of Defense is accelerating the introduction of AI into military networks, and that the integration could strengthen the company's foothold in large defense contracts. Pentagon-related contracts for xAI are reportedly worth up to $200 million (approximately 30 billion yen), and AI could play a key role in automating operations in Starlink and Starshield, which are targeted at national security.
In terms of corporate value, SpaceX is valued at $800 billion (approximately 120 trillion yen) based on its most recent private stock sale, and it is said that its market capitalization could exceed $1 trillion (approximately 150 trillion yen) at the time of its IPO. xAI is also reportedly valued at $230 billion (approximately 34.5 trillion yen) and raised $20 billion (approximately 3 trillion yen) in January 2026. Technology media outlet The Verge reports that Tesla will invest approximately $2 billion (approximately 300 billion yen) in xAI, as well as that Tesla sold its emergency batteries to xAI for $430 million (approximately 64.5 billion yen) in 2025.
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American financial media outlet Bloomberg reports that SpaceX is also considering a stock exchange with Tesla, and that some investors are strongly supporting a partnership between SpaceX and Tesla. According to Bloomberg, Tesla's energy storage system manufacturing capabilities would contribute to SpaceX's plan to operate data centers in space using solar energy, and there are expected synergies, such as Starship transporting Tesla's humanoid robot, Optimus , to the Moon and Mars. The report also reports that online brokerage Robinhood is making arrangements to play an important role for retail investors in this mega IPO.
Bloomberg reports that the deal, which could attract strong interest from infrastructure funds and Middle Eastern sovereign wealth funds, will require significant financing, and that a merger entity involving SpaceX Chief Financial Officer Brett Johnsen was formed in Nevada on January 21.
by Gage Skidmore
The Financial Times reported that SpaceX plans to hold its IPO in mid-June 2026, coinciding with Musk's birthday and the appearance of Jupiter and Venus coming close together. The company said it aims to raise up to $50 billion through the listing, potentially valuing the company at $1.5 trillion. The funds raised are expected to be used to accelerate the development of Starship, designed to carry humans to Mars. However, a source said, 'We need to file an S-1 with the Securities and Exchange Commission and prepare for a roadshow, so a June listing is tight.'
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