SpaceX, Elon Musk's space company that is said to be preparing a large-scale initial public offering (IPO), is weighing the possibility of a merger with electric vehicle maker Tesla and artificial intelligence (AI) company xAI, according to reports. Musk serves as chief executive officer (CEO) at all three companies, prompting speculation that the "Musk ecosystem" could become even more tightly knit.
Reuters reported on the 29th (local time), citing multiple sources, that SpaceX and xAI have, since the start of this year, been discussing a combination in which xAI shares would be exchanged for SpaceX shares. Bloomberg also reported, citing multiple people familiar, that SpaceX is reviewing a merger with Tesla while also looking at a business combination with xAI as an alternative.
The clue that stoked this speculation was found in the U.S. state of Nevada. According to local corporations registration documents, a corporation named "K2 MERGER SUB" and a limited liability company (LLC) named "K2 MERGER SUB 2" were both established on the 21st. Brett Johnson, SpaceX's chief financial officer (CFO), was listed as the sole officer for the corporation, and the LLC showed Johnson and SpaceX the corporation as its management. Given that "Merger" is included in the legal entity names, some interpret them as special purpose vehicles (SPVs) that could be used in merger procedures.
Whether the talks will actually lead to a conclusion remains uncertain. According to the reports, the sources said no final decision has been made yet and that the terms and timing are fluid. As a result, there is also a possibility that the three companies will remain separate legal entities as they are now. Musk and SpaceX, Tesla, and xAI reportedly did not issue separate comments in response to related inquiries.
Markets are focused on the "synergy" if a merger goes through. If SpaceX teams up with Tesla or xAI, observers say plans to combine robots and AI models with rockets and satellite communications could become more concrete. In particular, if combined with Tesla, scenarios are being discussed for deploying the Humanoid Robot "Optimus" in lunar and Mars exploration and settlement construction. There are also expectations that leveraging Tesla's accumulated manufacturing and engineering infrastructure could boost mass-production capacity for rockets and satellites. Some analysts say capabilities in energy storage systems, including batteries, could dovetail with the "space data center" operations SpaceX is envisioning.
A combination scenario with xAI is interpreted in a similar vein. Musk's idea of building data centers needed for AI training and operation in space could gain momentum by combining with SpaceX's launch vehicle and satellite infrastructure. Musk has recently continued remarks to the effect that "building AI data centers in space is efficient" and noted at the World Economic Forum (WEF) in Davos, Switzerland, that it "will become a reality within 2 to 3 years." Some in the market say the backdrop to SpaceX's active push for an IPO is not unrelated to raising funds needed for such large-scale infrastructure plans.
Reuters analyzed that if SpaceX and xAI combine, it could also create a favorable landscape for expanding U.S. Ministry of National Defense-related business. The reason is that it could become possible to offer SpaceX's military satellite service "Starshield," which the ministry already uses, bundled with xAI's AI models.