Elon Musk’s SpaceX, Tesla, and xAI in talks to merge, according to reports

Three companies led by Elon Musk — SpaceX, xAI, and Tesla — are reportedly being considered for a potential merger. While the talks are said to be at an early stage, according to reports from Bloomberg and Reuters, they could eventually result in one or more of the companies being folded into SpaceX.

Two possible scenarios are currently under consideration. In one, SpaceX and Tesla could merge, according to Bloomberg, citing people familiar with the discussions. In another scenario, SpaceX could merge with xAI, which already owns Musk's social media platform X.

Reuters reported that a merger between SpaceX and xAI could occur ahead of SpaceX's planned initial public offering later this year. Such a deal would bring together a wide range of products and platforms — including the Grok chatbot, the X platform, Starlink satellites, and SpaceX's rockets — under a single corporate structure.

Neither SpaceX nor xAI has publicly commented on the possibility of a merger. However, recent corporate filings show that two new entities, K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, were established in Nevada on January 21. The filings suggest that Musk is positioning his companies to keep multiple structural options open.

Each potential combination carries strategic advantages. A merger between SpaceX and xAI could allow xAI to pursue Musk's long-stated ambition of placing data centres in space. A SpaceX–Tesla merger, meanwhile, could align Tesla's growing energy storage business with future space-based data centre infrastructure.

All of the proposed scenarios — including the possibility of combining all three companies — are consistent with Musk's recent moves to consolidate operations or share resources across his businesses. Last year, SpaceX agreed to invest $2 billion in xAI, according to The Wall Street Journal. Earlier this week, Tesla disclosed that it had also invested $2 billion in the AI startup.

In 2025, xAI acquired X in a transaction that Musk said valued xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, has also continued to climb in valuation. The company reportedly completed a secondary share sale that valued it at around $800 billion, making it the most valuable private company in the United States.

A recent Financial Times report indicated that Musk is aiming to take SpaceX public as early as June. As with many of Musk's ambitious timelines, however, the plan could still shift. This story was initially published at 10:30 a.m. PT and has since been updated to include new details related to Tesla.