Is Musk Building His Empire?... SpaceX, Tesla, and xAI Begin Integration Moves

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SpaceX, the space development company led by Elon Musk, is reportedly considering the possibility of merging with either the electric vehicle manufacturer Tesla or the artificial intelligence (AI) company xAI. As SpaceX prepares for its initial public offering (IPO), analysts suggest that CEO Musk may be seriously contemplating restructuring and integrating his various businesses.

Reuters Yonhap News

According to Bloomberg and other sources on January 29 (local time), SpaceX has recently been in discussions about a merger with xAI, while also examining the possibility of combining with Tesla.

◆ SpaceX and xAI Merger Talks = Reuters, citing sources, reported that the companies are discussing a merger in which xAI shares would be exchanged for SpaceX shares. The structure most likely involves exchanging xAI shares for SpaceX shares, and some xAI executives may also be offered the option to receive cash.

Sources said that two entities were established in Nevada to facilitate the merger process. According to Nevada corporate registration documents, these entities were founded on January 21. One of the newly established entities lists SpaceX and Bret Johnsen, SpaceX's Chief Financial Officer (CFO), as part of its management. The other entity lists Johnsen as its sole executive. The filings did not disclose the purpose of these entities or their roles in any transactions.

If the two companies merge, rocket and satellite internet service Starlink, X (formerly Twitter), and the AI chatbot "Grok" would all come under one roof. xAI previously acquired X through a share exchange last year. SpaceX is pursuing an IPO this year, and its corporate value is estimated at 800 billion dollars. As of November last year, xAI was valued at 230 billion dollars.

◆ Possibility of a Tesla Merger = Meanwhile, Bloomberg reported, citing multiple sources, that SpaceX is also considering a merger with Tesla. However, no final decision has been made, details may change, and each company may choose to remain independent, according to the sources. Neither Musk nor the companies have issued an official response to inquiries about the merger discussions.

Analysts say these merger talks are rooted in CEO Musk's long-term vision for a "space-based AI infrastructure" strategy. Musk has presented a vision to develop SpaceX beyond a simple launch vehicle company, transforming it into a core platform for space-based data centers that perform AI computations. If xAI can leverage the vast computing power provided by SpaceX's orbital data centers, it could strengthen its AI competitiveness. At the World Economic Forum (WEF) in Davos, Switzerland, Musk recently stated that space-based AI data centers powered by solar energy will become the most efficient locations for AI processing in the future.

If a merger with Tesla is pursued, significant synergy effects are expected. Tesla possesses production capabilities for batteries and energy storage systems (ESS). SpaceX could contribute to operating data centers in space using solar energy. Musk has also revealed plans to use SpaceX's Starship rocket to transport Tesla's humanoid robot "Optimus" to Mars.

On the Nasdaq market that day, Tesla closed at $416.56, down 3.45% from the previous session. However, after reports of a potential merger with SpaceX, the stock rebounded by 2.87% in after-hours trading, reaching $428.50.