Elon Musk’s SpaceX is reportedly evaluating a potential merger with Tesla Inc., alongside an alternative combination with Musk’s artificial-intelligence firm xAI, according to a Bloomberg News report cited by Reuters. People with knowledge of the discussions said the deliberations are preliminary and no definitive agreements have been reached.
The news enlivened markets: Tesla shares climbed about 3% in after-hours trading following the report, reflecting investor appetite for consolidation among Musk-led companies. Neither SpaceX nor Tesla has issued an official statement on the merger considerations.
SpaceX and xAI have also been in talks about combining their operations ahead of what could be a major SpaceX IPO later this year, a move first reported exclusively by Reuters. That consolidation would fold SpaceX’s rockets, Starlink satellite internet, the X social media platform, and the Grok AI chatbot under a single corporate structure.
The idea of a SpaceX–Tesla tie-up is gaining traction among some investors, who believe such a merger could draw substantial interest from infrastructure funds and sovereign wealth investors, particularly from the Middle East, and help streamline Musk’s sprawling business empire.
Analysts note that combining electric mobility, space infrastructure, and advanced AI under one umbrella could create compelling synergies, but they also warn of significant challenges. Integrating operations that span different industries and regulatory environments poses complex strategic, financial and governance hurdles, and there is ongoing speculation that the companies may ultimately decide to remain independent.
Market observers also point to broader shifts within Musk’s ventures, including Tesla’s strategic pivot toward AI-driven robotics and autonomous services, as seen in its latest operating results, and SpaceX’s preparations for what could be one of the largest IPOs in history. These trends underscore the evolving corporate landscape Musk is shaping across automotive, space, and AI sectors.
As of now, the merger discussions remain exploratory, with timelines, terms and regulatory considerations yet to be defined.