Elon Musk explores landmark SpaceX merger with Tesla or xAI: Report
Elon Musk is reportedly considering a merger between two of his companies, SpaceX, electric vehicle manufacturer Tesla or his artificial intelligence startup, xAI.
- Jan 30, 2026,
- Updated Jan 30, 2026 11:20 AM IST
Elon Musk is reportedly considering consolidating his business empire, with SpaceX weighing a potential merger with either electric vehicle manufacturer Tesla or his artificial intelligence startup, xAI.
The billionaire is exploring ways to align his various ventures more closely, Bloomberg reported, citing people familiar with the matter. The discussions are said to be at an early stage, and no final decisions have been made regarding a formal tie-up.
While SpaceX is reportedly preparing for an initial public offering (IPO) later this year, the report suggests that some investors are pushing for a merger with Tesla. Such a move would combine the world’s leading private space firm with the publicly traded automotive giant.
Alternatively, SpaceX is exploring a combination with xAI. This deal would reportedly involve exchanging xAI shares for SpaceX stock. Documents filed in Nevada earlier this month revealed the creation of two new corporate entities, listing SpaceX Chief Financial Officer Bret Johnsen as an executive, which may facilitate such a transaction.
The potential mergers appear driven by Musk’s vision for orbital computing. At the World Economic Forum in Davos, Musk suggested that space would be the "lowest cost place to put AI" due to the abundance of solar energy. A merger could see Tesla’s energy storage expertise and SpaceX’s Starlink infrastructure supporting xAI’s "Grok" model in orbit.
The news sparked immediate interest in the financial markets. Tesla’s shares rose by as much as 4.5% in after-hours trading following the report. Analysts suggest that any such deal would attract significant interest from infrastructure funds and Middle Eastern sovereign wealth funds; however, it would also likely face intense regulatory scrutiny due to Musk’s overlapping leadership roles.
"Musk has too many separate companies," said Dennis Dick, chief market strategist at Stock Trader Network. "A major risk thesis for Tesla is that Musk is spreading himself out too much. As a Tesla shareholder, I applaud further consolidation."
Under a SpaceX-xAI merger, xAI shares would be exchanged for SpaceX shares. The two companies have been established in Nevada to facilitate, said the person briefed on the matter, requesting anonymity because discussions are confidential.
Representatives for Tesla, SpaceX, and xAI have not yet officially commented on the reports.
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Elon Musk is reportedly considering consolidating his business empire, with SpaceX weighing a potential merger with either electric vehicle manufacturer Tesla or his artificial intelligence startup, xAI.
The billionaire is exploring ways to align his various ventures more closely, Bloomberg reported, citing people familiar with the matter. The discussions are said to be at an early stage, and no final decisions have been made regarding a formal tie-up.
While SpaceX is reportedly preparing for an initial public offering (IPO) later this year, the report suggests that some investors are pushing for a merger with Tesla. Such a move would combine the world’s leading private space firm with the publicly traded automotive giant.
Alternatively, SpaceX is exploring a combination with xAI. This deal would reportedly involve exchanging xAI shares for SpaceX stock. Documents filed in Nevada earlier this month revealed the creation of two new corporate entities, listing SpaceX Chief Financial Officer Bret Johnsen as an executive, which may facilitate such a transaction.
The potential mergers appear driven by Musk’s vision for orbital computing. At the World Economic Forum in Davos, Musk suggested that space would be the "lowest cost place to put AI" due to the abundance of solar energy. A merger could see Tesla’s energy storage expertise and SpaceX’s Starlink infrastructure supporting xAI’s "Grok" model in orbit.
The news sparked immediate interest in the financial markets. Tesla’s shares rose by as much as 4.5% in after-hours trading following the report. Analysts suggest that any such deal would attract significant interest from infrastructure funds and Middle Eastern sovereign wealth funds; however, it would also likely face intense regulatory scrutiny due to Musk’s overlapping leadership roles.
"Musk has too many separate companies," said Dennis Dick, chief market strategist at Stock Trader Network. "A major risk thesis for Tesla is that Musk is spreading himself out too much. As a Tesla shareholder, I applaud further consolidation."
Under a SpaceX-xAI merger, xAI shares would be exchanged for SpaceX shares. The two companies have been established in Nevada to facilitate, said the person briefed on the matter, requesting anonymity because discussions are confidential.
Representatives for Tesla, SpaceX, and xAI have not yet officially commented on the reports.
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