Elon Musk is reportedly weighing a major consolidation of his business empire, with new reports indicating SpaceX has held internal discussions about a potential merger with either Tesla or Musk’s artificial intelligence startup xAI.
According to company filing and sources cited by Reuters and Bloomberg, SpaceX has evaluated the feasibility of combining with Tesla, an idea that some investors are reportedly encouraging. At the same time, executives have also explored an alternative path that would see xAI folded into SpaceX ahead of a possible public offering later this year potentially worth up to $1.5 trillion.
While no decisions have been made and discussions remain preliminary, the talks highlight Musk’s growing interest in consolidating his companies as their technologies increasingly overlap.
The idea of a SpaceX–Tesla merger is not entirely new. For years, Musk has emphasized the strategic links between the two companies, from shared manufacturing philosophies to overlapping leadership and engineering talent. Tesla already relies heavily on SpaceX technologies, including Starlink for connectivity testing and SpaceX-style rapid iteration methods in its factories. A formal combination could, at least in theory, streamline capital allocation and deepen collaboration across robotics, autonomy, and advanced manufacturing.
However, a merger of that scale could face significant 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 merge the two would almost certainly draw intense regulatory scrutiny and raise governance questions, particularly given Musk’s leadership roles across multiple entities.
The alternative under consideration—integrating xAI into SpaceX—may be more immediately practical. CNBC reports that Musk has discussed merging xAI into SpaceX through a share swap, potentially structured through newly created Nevada-based entities tied to SpaceX. Under this proposal, xAI shareholders would receive SpaceX stock, effectively bringing the AI company under SpaceX’s corporate umbrella.
For Tesla investors, the reports are particularly notable given the automaker’s recent $2 billion investment in xAI, announced yesterday.
