Elon Musk and his supporters have long floated the idea of a sweeping “Musk Inc” that would combine the billionaire’s various companies under one umbrella. But as SpaceX moves closer to a potential public listing and Tesla navigates a difficult shift toward robotaxis and humanoid robots, analysts and investors say any grand consolidation is more likely to start small.
Reuters reported on Thursday that SpaceX is nearing a deal to acquire xAI, Musk’s artificial intelligence startup, a move that could advance his ambition to build data centres in orbit — a concept he has described as ideal for power-hungry AI systems. Because both SpaceX and xAI are privately held and controlled by Musk, such a merger would face fewer financial and regulatory hurdles than a potential combination involving Tesla.
Bloomberg also reported that SpaceX has considered a merger with Tesla, alongside the option of combining with xAI. However, analysts say a SpaceX–Tesla deal is less likely in the near term.
Mergers involving a company as large as Tesla typically require shareholder approval, either through a vote or a share tender offer — processes that can become contentious. While Musk has historically retained strong backing from Tesla investors, the complexity of merging a public company with a massive private enterprise remains a major obstacle.
The strategic rationale for any broader tie-up lies in the companies’ shared artificial intelligence ambitions. Tesla is betting heavily on autonomous vehicles and humanoid robots, while SpaceX is developing satellite and launch infrastructure that could one day support orbiting data centres capable of supplying vast computing power.
“If you’re trying to build robots, autonomous cars and rockets, these things all fit together,” said Arthur Laffer Jr., president of Laffer Tengler Investments and a Tesla investor. He said Musk views each of his companies as part of an integrated ecosystem.
Tesla, however, is still at an early stage in its transition toward autonomy and robotics — a shift made more urgent by declining electric vehicle sales over the past two years.
For investors across Musk’s companies, a SpaceX–xAI merger is easier to assess financially. An acquisition of xAI would not necessarily delay a SpaceX initial public offering, which is expected later this year at a valuation that some reports say could exceed $1 trillion.
xAI, which is significantly smaller, raised $20 billion this month in a funding round that surpassed its $15 billion target, valuing the company at about $230 billion.
By contrast, Tesla’s market capitalisation exceeds $1.4 trillion after its shares rose 3.3% on Friday.
“Ultimately, most Tesla and SpaceX investors are betting on Elon Musk himself,” said Andrew Rocco, a stock strategist at Zacks Investment Research. He said a single corporate entity could help concentrate Musk’s attention and resources.
Antitrust concerns would likely be limited, as Tesla, SpaceX and xAI operate in distinct markets and are already effectively controlled by Musk, said William Kovacic, a former chairman of the U.S. Federal Trade Commission.
Still, Tesla investors could be wary of a merger with SpaceX over fears that Tesla might overpay for a private company whose valuation is harder to scrutinise.
“Combining all or part of Musk’s empire into Tesla would involve significant complexity,” said John Streur, senior managing partner at Boston Common Asset Management. He warned that extremely high valuations for private assets could be dilutive for Tesla shareholders.
Tesla currently trades at a forward price-to-earnings ratio above 200, far higher than major technology peers such as Meta Platforms, Microsoft and Alphabet, whose ratios range between 25 and 35, according to LSEG data.
Edward Best, co-chair of the capital markets practice at Willkie Farr & Gallagher, said a SpaceX IPO would make any future Tesla–SpaceX merger easier to value.
“At least then you have an independent valuation,” he said. “With a private company, the question becomes: is it $700 billion, $1 trillion, or $1.5 trillion?”