Elon Musk's two technology behemoths—Tesla Motors and SpaceX—which he founded and leads, are actively contemplating a merger. This move is potentially aimed at significantly boosting the valuation of the global space exploration unicorn ahead of a SpaceX IPO, or could be interpreted as Musk striving to aggressively elevate Tesla's market capitalization to meet a trillion-dollar compensation KPI. It is understood, based on media reports citing informed sources, that SpaceX is evaluating a potential major merger project with Tesla. Concurrently, SpaceX's senior management is also studying an alternative large-scale merger plan with xAI, another Musk-founded startup and one of OpenAI's most formidable competitors. These potential maneuvers indicate the billionaire is weighing how to construct the most colossal "technology commercial empire" in human history—the "Musk Super Commercial Empire."
According to media reports, sources indicate that the space exploration company's management has discussed the feasibility of a SpaceX-Tesla alliance, an idea being propelled by certain large institutional investors. The sources requested anonymity as the information is not yet public. The sources also stated that, ahead of SpaceX's planned initial public offering (IPO) on the U.S. stock market in 2026, they are exploring the alternative scheme of a merger between SpaceX and xAI. This consideration arises because a merger involving Tesla, with its trillion-dollar market cap, could face significant regulatory hurdles.
The sources suggested that any transaction developments involving these three tech companies could attract substantial investment interest from large infrastructure funds and Middle Eastern sovereign wealth investors. Another source mentioned that a deal might also require a considerable financing package. As reported, SpaceX has not yet made any final decisions, details are subject to change, and the space exploration company—valued at a staggering $1.5 trillion—might ultimately choose to remain independent. Musk, along with representatives for SpaceX, xAI, and Tesla, did not immediately respond to requests for comment.
Is this a pre-IPO publicity push for the trillion-dollar-valued SpaceX? Musk's grand vision for SpaceX—deploying massive AI data centers into space to handle highly complex computational workloads for Earth's enormous AI applications—could see its core components, launched into space, receive customized services under the different proposed schemes. If viable, this super-project could see both xAI and Tesla derive immense benefits from the computational power offered by SpaceX's orbital data centers.
Orbital mega-scale AI data centers could become the core infrastructure powering xAI's cutting-edge agentic AI applications and Tesla's AI supercomputing ecosystem, including FSD (Full Self-Driving), the Optimus humanoid robot, and the fully autonomous Robotaxi network. Furthermore, Tesla's unique capability in manufacturing massive energy storage systems could potentially help SpaceX power these data centers in space using limitless solar energy.
Within Musk's commercial portfolio, SpaceX increasingly resembles a "core infrastructure company." It has transformed "access to space" (launch) and "orbital utility" (satellite communications/services) into scalable, replicable, and monetizable capabilities, concurrently possessing high-frequency launch capacity and a recurring revenue growth curve from services like Starlink/Starshield. SpaceX has further deepened its "national-level infrastructure" attributes through projects for intelligence and defense agencies.
SpaceX's current intense focus on space-based AI compute is intrinsically linked to Tesla's future AI compute needs. The "space data center/orbital compute" bullish narrative, championed by SpaceX, is poised to provide the fundamental infrastructure backbone for Tesla's AI, autonomous driving, Robotaxi, and even humanoid robot ambitions. In Musk's AI compute infrastructure blueprint, as the AI boom increasingly confronts bottlenecks in infrastructure and energy supply, the next major leap for artificial intelligence might not occur on land, but in space. Musk has also previously discussed using SpaceX's flagship Starship rocket to transport Tesla's Optimus humanoid robots to the lunar and Martian surfaces.
In after-hours trading on Thursday, Tesla's stock surged as much as 4.5% catalyzed by the merger-related news. The stock had fallen 3.5% during the regular trading session, leaving Tesla with a market capitalization of approximately $1.56 trillion at Thursday's close. Previous media reports indicated that SpaceX, targeting a 2026 U.S. IPO, plans to value the space exploration unicorn at around $1.5 trillion.
Nevada's corporate registry shows that on January 21st, two legal entities containing the phrase "merger sub" were established in the state, listing SpaceX CFO Bret Johnsen as the responsible person. Earlier reports suggested that in a potential SpaceX-xAI merger, xAI shares would be exchanged for SpaceX shares, and as part of the deal, some xAI executives might have the option to receive cash instead of SpaceX stock.
Sources indicated that SpaceX is weighing a June listing, timed near Musk's birthday, and could seek to raise up to $50 billion, which would make it the largest IPO in history. Wall Street's largest investment banks—Bank of America Corp., Goldman Sachs, JPMorgan Chase & Co., and Morgan Stanley—are expected to take on core roles. Reports on Wednesday stated that Robinhood Markets Inc., the U.S. "finfluencer broker" famed for popularizing stock trading among young people and dubbed "the favorite trading platform of retail investors," is vying for a key role targeting retail investors in SpaceX's unprecedented IPO. SpaceX's Johnsen told employees in December that a potential IPO would help fund "an almost insane launch frequency" for the still-in-development Starship rocket and establish a large base on the Moon.
This isn't science fiction! A technology behemoth combining "automotive manufacturing + AI + autonomous driving + Robotaxi + humanoid robots + Starlink-based commercial spaceflight + space compute + ..." is on the verge of being born. As Tesla CEO Elon Musk highlighted positive progress in large-scale energy storage, artificial intelligence, Full Self-Driving (FSD), Robotaxi, and the revolutionary Optimus humanoid robot during an earnings call, the market chose to believe in the "Tesla Super Tech Empire" he portrayed. Despite reporting its first annual revenue decline and disappointing Q4 profits, the company's stock still trended upwards in after-hours trading following the latest news.
Furthermore, despite recent sluggish earnings, Tesla's stock has soared approximately 50% since the second half of 2025. More significantly, long-term Tesla shareholders and "Musk disciples" who buy on dips are increasingly linking the prospects of SpaceX—the $1.5 trillion-valued space exploration leader also founded and led by Musk, with its narrative of "Starlink's wild expansion and space AI compute system super-growth"—to Tesla's fundamental outlook. The formidable belief power, amplified by the synergy of various "cyber-tech" elements, strongly underpins Tesla's long-term growth narrative and its historically high valuation.
While Tesla's core business struggles, Musk is attempting to redirect investor attention elsewhere. The market appears to be increasingly accepting that AI, autonomous driving, the emerging Robotaxi service, the not-yet-mass-produced Optimus humanoid robot, and even SpaceX—the global commercial space and exploration leader deeply intertwined with Musk himself—are the core drivers of the "Tesla Empire." These long-term, grand narratives continue to inject massive imagination into Tesla's already elevated valuation. He has been particularly vocal about the company's nascent, not-yet-public Robotaxi business and the Optimus humanoid robot.
Musk stated that Tesla plans to convert its Fremont, California factory production lines—currently used for Model S and X—into a mass production line for the upcoming Optimus AI humanoid robot. "We are truly entering a future based on autonomy and full automation driven by AI," Musk said on the earnings call, preparing investors for Tesla's continued high level of capital expenditure. Tesla management repeatedly emphasized during the call that the Cybercab, Semi truck, Optimus humanoid robot, and Megapack 3 energy storage system are all on track to begin mass production this year.
Regarding the humanoid robot, Tesla CEO Musk stated that plans are to unveil the third-generation Optimus this quarter. "Gen 3 is our first design intended for mass production," Musk said. Tesla's goal in developing the Optimus robot is to eventually sell it as a bipedal, super-AI-powered robot capable of performing tasks ranging from factory work to babysitting, and even executing space exploration missions for SpaceX, including missions to Mars. Musk emphasized that the Optimus robot will undergo significant upgrades in 2025 and 2026, including a latest hand design, with the Gen 3 model being the first "designed for scalability." The company stressed it has begun supply chain and production line preparations for the first mass-production line, targeting "launching the mass production line by the end of 2026," with a long-term capacity goal of ultimately reaching one million units per year.
Alongside its Q4 earnings release, Tesla stated in a filing that on January 16th, it reached an agreement to invest approximately $2 billion in xAI—the AI startup founded by Musk and a key competitor to OpenAI—as a significant part of "its recently disclosed funding round." Earlier this month, this strong OpenAI competitor announced its latest funding round had reached $20 billion, exceeding its initial $15 billion target, with participation from U.S. tech giants Nvidia and Cisco. Tesla emphasized that the latest substantial investment in xAI and the long-term collaboration "aims to enhance Tesla's ability to develop and deploy cutting-edge AI products and services into the physical world at scale."
SpaceX, along with its flagship businesses Starlink and the planned space AI compute system, are independent entities under SpaceX. However, the "Musk ecosystem" constructed by SpaceX and Tesla is potent enough to influence long-term sentiment around Tesla's stock and its premium based on futuristic "cyber-tech" narratives. Major developments at SpaceX (e.g., IPO rumors/progress, Starlink growth, space AI compute infrastructure progress) significantly strengthen the market's positive assessment of Musk's execution capability and risk appetite, thereby impacting Tesla's long-term valuation anchor and continuously providing new catalysts for its narrative.
As the primary bottleneck for global AI data centers shifts from "AI chips" to "power systems and deployment," the concept within the SpaceX narrative of "launching data centers into orbit and powering them with solar energy" is entering an engineering trial phase. Capital markets urgently crave larger, more stable capital pools and more unified organizational boundaries. Therefore, merely consolidating "commercial space (Starlink/Starshield) + compute (ground/future orbital) + models (Grok AI model/AI agent products) + marketing/distribution (X social media platform)" into a single financing entity would be sufficient to create an unprecedented "grand narrative framework" in global capital market history.
The world's richest man, Elon Musk, appears to be weaving "commercial space launch + Starlink communications + space AI compute systems/AI models + energy/storage + electric vehicles + autonomous driving + robotics manufacturing" into a single, financeable, and coherent "super vertically integrated asset chain," aiming to amplify leverage simultaneously in both capital markets and the industrial sector. Unifying the world's hottest investment themes or narratives—"AI, communications, spaceflight, energy, robotics"—into a single "full-stack infrastructure platform" would undoubtedly provide significant advantages for the pricing of a mega-IPO, elevating Tesla's valuation, facilitating pre- and mid-IPO roadshows, and shaping the investor base.
