Elon Musk has held internal discussions about potentially consolidating parts of his business empire, including exploring whether SpaceX could merge with Tesla or absorb his artificial intelligence startup xAI, according to company filings and sources cited by Reuters and Bloomberg.
SpaceX has evaluated the feasibility of a combination with Tesla, an idea that some investors are said to be encouraging, the sources said. Executives have also discussed an alternative scenario in which xAI would be folded into SpaceX ahead of a potential public offering later this year that could value the combined business at as much as $1.5 trillion. No decisions have been taken, and the discussions remain at an early and exploratory stage, the sources added.
The talks reflect Musk’s growing interest in closer integration among his companies as their technologies increasingly overlap. Musk has long pointed to strategic links between Tesla and SpaceX, citing shared manufacturing philosophies, overlapping engineering talent and common approaches to rapid iteration. Tesla has also relied on SpaceX technologies, including Starlink satellite connectivity for testing and operational support.
A formal merger between SpaceX and Tesla would, however, face significant structural and regulatory hurdles. Tesla is a publicly traded company with a broad base of retail and institutional shareholders, while SpaceX remains privately held and tightly controlled by Musk. Any attempt to combine the two would likely draw intense scrutiny from regulators and investors, particularly over governance, conflicts of interest and valuation.
The option of integrating xAI into SpaceX may be more immediately practical, according to people familiar with the discussions. CNBC reported that Musk has considered merging xAI into SpaceX through a share swap, potentially using newly created Nevada-based entities linked to SpaceX. Under that structure, xAI shareholders would receive SpaceX stock, effectively bringing the AI startup under SpaceX’s corporate umbrella.
The reports are especially notable for Tesla investors following the automaker’s recent $2 billion investment in xAI, announced this week, underscoring the increasingly intertwined financial and strategic relationships across Musk’s companies.
