SpaceX is negotiating a merger ahead of a planned large initial public offering (IPO) later this year. Any merger deal could attract significant interest from Middle Eastern infrastructure funds and sovereign investors. A SpaceX-Tesla merger is an idea being pushed by some of the automaker’s investors, Bloomberg reported.
The market value of SpaceX could be more than one trillion dollars (20.4 trillion crowns), Reuters reported. It is the most valuable company in private ownership, with a recent private sale of shares valuing the company at $800 billion. xAI was valued at $230 billion last November. Tesla’s market capitalization is roughly $1.5 trillion.
Some Tesla shareholders have long pushed for a merger of Musk’s companies. “Musk has too many separate businesses,” said Stock Trader Network analyst Dennis Dick. “The main risk for Tesla is that Musk gets too distracted. As a Tesla shareholder, I welcome further consolidation,” added Dick.
Musk is the richest person in the world and is the CEO of both SpaceX and xAI, which includes the social network X. He also runs Tesla, The Boring Company and neurotechnology company Neuralink.
A potential transaction with xAI could complicate SpaceX’s IPO. But it could increase its chances of winning contracts from the Pentagon, which is trying to make more use of artificial intelligence (AI). It would also boost efforts to put data centers into orbit, which aims to reduce the cost of generating the computing power needed to run and train AI models.
Last week in Davos, Switzerland, Musk said that space will be the cheapest place to put AI, and that it will happen within two, three years at the latest. But his time forecasts rarely come true.
Musk has merged businesses before. In 2016, he used Tesla stock to buy SolarCity. Last year, he merged the social network X with the company xAI.
Gerber Kawasaki Wealth and Investment Management CEO Ross Gerber said he could envision a merger of Musk’s businesses.
“It’s like a bunch of overvalued companies combined into one big overvalued chaotic organization run by Elon. But now it’s pure play. It’s like, do you want to invest in Elon? There you have it. You get all this. And it’s actually much more attractive as an investment,” he said. His company is an investor in Tesla and xAI.
