Three of Elon Musk’s companies, SpaceX, xAI, and Tesla, are considering a possible merger. Negotiations appear to be in the early stages, but at least one company could end up being acquired by SpaceX, according to reports from Bloomberg and Reuters.
Two scenarios are considered. According to Bloomberg, citing unnamed insiders, SpaceX and Tesla may merge. In another case, SpaceX and aXI (which already owns Musk’s social media platform X) would merge.
According to a report from Reuters, a merger between SpaceX and xAI could occur ahead of SpaceX’s IPO, which is scheduled for this year. This will bring together products such as the Grok chatbot, X platform, Starlink satellites, and SpaceX rockets under one company.
Company representatives from SpaceX and xAI have not publicly discussed this possibility. However, two new legal entities were formed in Nevada on Jan. 21: K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, according to recent filings. This suggests that Musk is keeping all options open.
Both scenarios have advantages. Combining SpaceX and xAI could allow xAI to put its own data centers in space, something Musk has said he would like to do. A partnership between SpaceX and Tesla could also align the EV maker’s energy storage business with its space data center initiative.
And both options, and the combination of all three companies, are consistent with Musk’s comments and recent actions toward consolidation, or at least sharing of resources between the three companies. According to the Wall Street Journal, SpaceX agreed to invest $2 billion in xAI last year, and earlier this week it was revealed that Tesla (also led by Musk) had also invested $2 billion in the AI startup.
Last year, xAI acquired X in a deal that Musk said valued xAI at $80 billion and X at $33 billion. SpaceX, which has been around since 2002, reportedly launched a secondary sale worth $800 billion, making it the most valuable private company in the United States.
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According to a recent Financial Times report, Musk wants to take SpaceX public in June. Then again, Musk’s grand plans rarely come to fruition as planned.
This article was first published at 10:30 a.m. PT. Since then, new information about Tesla has been updated.
