Elon Musk is once again pushing the boundaries of technology integration by merging SpaceX with AI startup xAI in what could become one of the most ambitious combinations in corporate history.
The deal, announced ahead of SpaceX’s much-anticipated IPO later this year, is expected to create a vertically integrated innovation engine combining rockets, space-based internet, AI, direct-to-mobile communications, and a real-time information platform aimed at advancing Musk’s vision of scaling intelligence to understand the universe.
The combined company could be valued at roughly $1.25 trillion, with xAI itself valued at $250 billion, marking the largest tie-up across Musk’s enterprises to date.
Wedbush analyst Dan Ives called the merger “a bold step” that could have far-reaching implications beyond SpaceX and xAI. He noted that Tesla, which invested around $2 billion in xAI, could eventually play a role in the broader ecosystem. “There is a growing chance that Tesla will be merged in some form into SpaceX/xAI over time,” Ives wrote, highlighting Musk’s ambition to integrate AI, robotics, and energy solutions across his companies.
The merger also aligns with SpaceX’s plans to deploy up to one million satellites as part of a space-based data center strategy, creating AI compute capacity powered entirely by solar energy. Ives said the move positions Musk to control a substantial portion of the AI ecosystem, while providing a long-term path to cross-pollination between Tesla and SpaceX in autonomous driving, robotics, and AI infrastructure.
“This deal is bullish for the Tesla story,” Ives added, forecasting increased collaboration between Musk’s companies over the next 12 to 18 months.
By combining space and Earth-based technologies, Ives believes, Musk is setting the stage for a next-generation AI juggernaut that could reshape multiple industries and solidify his leadership across the AI and technology frontier.