Sources reveal that SpaceX is considering a merger with Tesla or integrating xAI before its IPO, reflecting Elon Musk's plan to connect space, automotive, and AI.
On January 30, 2026, at 5:22 AM, Bloomberg News reported that SpaceX is considering a merger with Tesla Inc., as well as another option: integrating with the artificial intelligence company xAI, according to sources close to the matter. This reflects Elon Musk weighing the possibilities of consolidating his business empire.
Sources indicate that SpaceX has discussed the possibility of a merger with Tesla, a concept pushed by some investors. Meanwhile, options for a merger between SpaceX and xAI are being explored, particularly prior to xAI's initial public offering (IPO ). However, no final decision has been made, and details are subject to change, including the possibility of the entire company continuing to operate independently.
If such a deal were to actually happen, it could attract interest from infrastructure funds and sovereign wealth funds from the Middle East, and would likely require substantial capital as a key component.
This merger idea aligns with Musk's long-term vision for SpaceX to establish data centers in space to support advanced AI computing. xAI could greatly benefit from the processing power of an orbiting data center if it can solve the engineering challenges. Meanwhile, Tesla could play a role with its ability to manufacture energy storage systems, allowing it to use solar power in space to operate the data center.
Musk has also spoken about using SpaceX's Starship rocket to transport Tesla's Optimus robot to the moon and Mars.
News of a potential merger boosted Tesla's stock price, which surged up to about 4.5% in after-market trading on Thursday, although the stock fell 3.5% during regular trading. This brought Tesla's market capitalization to approximately $1.56 trillion. Meanwhile, SpaceX is aiming for an IPO valuation of around $1.5 trillion, according to Bloomberg.
Data from the Nevada state business portal indicates that two entities with the words "merger sub" in their names were established on January 21st, with Bret Johnsen, SpaceX's Chief Financial Officer, as their executive , further fueling merger rumors.
Previously, Reuters reported that SpaceX was considering a merger with xAI, with xAI shares being exchanged for SpaceX shares, and some xAI executives may choose to receive cash instead of shares.
Sources also indicate that SpaceX may choose to go public in June, coinciding with Musk's birthday, and could raise up to $5 billion, making it the largest IPO in history. Major banks such as Bank of America Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley are expected to play a significant role, while Robinhood Markets Inc. is also pushing to participate in this historic IPO deal.
Bret Johnsen of SpaceX told employees in December that an IPO would boost Starship rocket launches to insane levels and support plans for future lunar bases.
Reference: www.bloomberg.com
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