Rumors: Musk is considering merging SpaceX with xAI and Tesla
According to a bunch of unconfirmed stories today from different news outlets, Elon Musk is considering merging SpaceX with xAI and Tesla as part of the initial public offering (IPO) of SpaceX that the company is contemplating for sometime this summer.
Reuters reports that Musk wants to merge xAI — his very valuable AI company that has already merged with the company that used to be called Twitter — into SpaceX, his very valuable rocket company. And Bloomberg reports that SpaceX is also considering a merger with Tesla, citing people familiar with the matter.
The SpaceX-xAI tie-up could help Musk build data centers in space. “The combination would bring Musk’s rockets, Starlink satellites, the X social media platform and Grok AI chatbot under one roof,” the Reuters report says. Then again, Reuters also says it doesn’t know several key details about the theoretical deal, including “its primary rationale.”
None of this is confirmed, but Musk has not denied it either. If so, this IPO would be the largest ever in the history of the stock markets, by many magnitudes. As noted at the link, xAI is raising gigantic amounts of capital. SpaceX in turn is expected to do even better in its IPO, as a single entity. Tesla is in far less demand, but this merger could be a way to reshape that company to give it a better future. It has already said it is beginning the transition from electronic cars to robots and other autonomous machines.
Whether such a merger will help SpaceX or Musk in his goal of building a Mars colony remains decidedly uncertain. A publicly traded stock company does not have the freedom of action that SpaceX now has as privately owned company.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
According to a bunch of unconfirmed stories today from different news outlets, Elon Musk is considering merging SpaceX with xAI and Tesla as part of the initial public offering (IPO) of SpaceX that the company is contemplating for sometime this summer.
Reuters reports that Musk wants to merge xAI — his very valuable AI company that has already merged with the company that used to be called Twitter — into SpaceX, his very valuable rocket company. And Bloomberg reports that SpaceX is also considering a merger with Tesla, citing people familiar with the matter.
The SpaceX-xAI tie-up could help Musk build data centers in space. “The combination would bring Musk’s rockets, Starlink satellites, the X social media platform and Grok AI chatbot under one roof,” the Reuters report says. Then again, Reuters also says it doesn’t know several key details about the theoretical deal, including “its primary rationale.”
None of this is confirmed, but Musk has not denied it either. If so, this IPO would be the largest ever in the history of the stock markets, by many magnitudes. As noted at the link, xAI is raising gigantic amounts of capital. SpaceX in turn is expected to do even better in its IPO, as a single entity. Tesla is in far less demand, but this merger could be a way to reshape that company to give it a better future. It has already said it is beginning the transition from electronic cars to robots and other autonomous machines.
Whether such a merger will help SpaceX or Musk in his goal of building a Mars colony remains decidedly uncertain. A publicly traded stock company does not have the freedom of action that SpaceX now has as privately owned company.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Merging all the entities together & pulling off the IPO will be an interesting reveal as to what E. Musk’s next steps will be. I would not blame him if he walks away from it all and takes a lower profile in the world. He may even have changed his mind on the subject of the importance of humanity being multiplanetary, given how he has been treated on this planet.
That does not seem to fit his style. I think a guy like that does not settle down and go quiet. His departure from control of those companies would free him up for new startups that would be active in making payloads for Mars, and for Mars colonization. There does seem to be a distinct lack of commercial activity that is prepared to take advantage of SS/SH, as well as putting advanced robotic capabilities for transport, construction, & ISRU onto Mars.
I wonder about the investors.
There are specific investors groups out there that specialize.
Would an electric auto investor group want to buy into a space company or an internet company?
And all the other ways around?
He must not see a big starting offer for one of his companies and is willing to dilute the others to raise cash for that one.
Tesla has at least ten more years of profitable production even if its just for replacement parts.
X is X if its not already profitable it never will be.
Space X. Nothing is close to even competing with it.
Starlink The same nothing close to competing with it. Its the new cable company of the world, plus its now offering cell phone service.
SpaceX doesn’t need a millstone around its neck.
Most billionaires don’t think like Elon…who I fear is going to go the same way as Hughes.
He will be in some dungeon…with a don’t-care butler he will bark orders to–none being followed through.
That’s my guess.
He should have stayed away from DC.
One thing is for sure – if Elon merges all of the Muskiverse companies into a single entity at least he would no longer be hectored by idiots who carp about him being a “part-time” CEO at each. I wonder if any of the rumors mention the possibility of The Boring Company and/or Neuralink being part of this Grand Unification? There would seem some obvious synergies anent The Boring Company on both the Moon and Mars. Neuralink seems more of a stretch.
The idea that Tesla is getting out of the electric vehicle business is just goofy. The next big step forward in ground transport is autonomous vehicle operation and Tesla is the runaway world leader in this technology. Ending the Model S and Model X vehicle lines simply allows Tesla to shed a pair of no-longer-particularly-distinctive niche model lines and concentrate resources on things that will produce a better return.
Stan W observed: “He may even have changed his mind on the subject of the importance of humanity being multiplanetary, given how he has been treated on this planet.”
As any persecuted peoples, from any time, could tell you: all the more reason.
I wish he would get out of the electric car business.
Lefties don’t want his cars now, and folks across the aisle never did like electric cars.
Tesla is a target on his back.
I can easily see a future lawsuit against that car company as a way to attack him on all fronts.
There is a grocery warehouse nearby…and while it’s name is plastered on the side of trailers–there is a little sticker with the name “Predestination Transportation.” That’s the name drivers are told to use.
That limits liability.
A rocket falls into the drink far out to sea-no biggie.
Wasn’t Apple looking to have electric cars?
Perhaps revenue from some kind of transfer would allow Elon to not have to make SpaceX public.
Stan W & Jeff Wright,
Well aren’t we a pair of Gloomy Guses. The idea of Elon stepping away from his enterprises just when everything is coming to a rolling boil is preposterous. This latest round of potential financial engineering is being pursued precisely so that Elon can upshift all of his efforts to Ludicrous Speed.
Tesla is a lot more than just an electric car company. Crucially, it is the only entity with a practical autonomous vehicle solution – something other carmakers will soon need whether their vehicles are powered by electricity, gasoline, LNG, diesel or hamsters running in a wheel. After trying, and failing, to match Tesla’s tech, the world’s carmakers will be lining up for licenses by the end of the decade if not sooner. Meanwhile, Tesla will be using its own technology to make Robotaxi service ubiquitous and end the economic viability of conventional human-driven taxi and ride-hail business models.
Whether the woke buy Teslas anymore is unimportant. There are fewer and fewer of those types as we go along. With Elon now firmly a fixture of the MAGA right, a lot of the former right-wing disdain for electric cars is flipping. The Right, quite reasonably, tended to identify electric cars with Green mandates in Blue states and federal subsidies. All of that is in the process of going away and what will be left is the inherent superiority of electric vehicle technology for pretty much any road-based transport use case.
And then, of course, there will be the Optimus humanoid robots.
Elon is very clever at finding ways to finance his projects by making use of a large consumer and/or government base needs.
Paypal was initially a software product used with ebay to facilitate transactions. (Paypal has since grown larger than ebay.) Musk sold Paypal to finance SpaceX. He learned a lesson, don’t sell the business – integrate it into other businesses and increase the financial synergy.
SpaceX leveraged government contracts to develop a human rated, space transportation system. Simultaneously, SpaceX developed a significantly reusable and affordable space delivery system with so much spare launch capacity it was able to essentially capture the private launch sector of the market, globally.
Next, SpaceX started it’s own satellite business called Starlink to further utilize this excess launch capability. A great side hustle that turned into a cashflow juggernaut. As with most satellites, Starlink is solar powered.
With Superheavy, SpaceX will be expanding Starlink data flow capacity by 10 fold using larger satellites. These satellites will each become a data center node likely inter connected using laser based data transmission – extremely fast. These data center will also be powered by the sun and cooled by space, as needed, using technology similar to the ISS. This approach will ease the burden of earth based electric power and water cooling infrastructure needed for AI. Some call it Internet 2.0. This system of inter connected satellites will contain much of our AI or AGI technology and will be continuously available, virtually everywhere on the planet.
Musk has hinted at Davos that space based solar energy could be used on earth. I’m guessing a variant of these satellite platforms could also be used to augment power generation on earth or mars.
All of these dynamic pieces seems to be fitting together for Elons goal of humans becoming a multi planetary species: A massive and robust reusable rocket system, electric vehicles, space based solar power generation, a planet wide communication system, large planetary scale AI infrastructure, boring machines for below surface infrastructure, etc.
Elon may soon have the money to push his vision forward significantly financed by the private sector.
Autonomy is worth more than shares.
But if Elon wants to leave his cabin door open in bear country–he is free to do so.
Dick Eagleson wrote: “With Elon now firmly a fixture of the MAGA right, a lot of the former right-wing disdain for electric cars is flipping. The Right, quite reasonably, tended to identify electric cars with Green mandates in Blue states and federal subsidies.”
I disagree. The Right didn’t so much disdain the idea of electric cars but instead tends to believe that a technology should be economical enough to succeed on its own without government subsidies to keep it going. Tesla showed the world the right way to make the electric car economical, or close to it. It isn’t that the right never liked electric cars, it is that they were not yet ready for prime time. Most auto makers still don’t do it right, which is why their cars don’t sell well; they only make their electric cars to comply with stupid laws that contradict economics.
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jburn wrote: “Next, SpaceX started it’s own satellite business called Starlink to further utilize this excess launch capability. A great side hustle that turned into a cashflow juggernaut”
I disagree with the purpose of Starlink. It was not intended to utilize excess launch capability. It was intended to become a cash cow juggernaut in order to fund Starship development and then to fund the colonization of Mars. Starship was intended to begin launching full-grown Starlink satellites a couple of years ago, but was governmental interference and otherwise overcome by events.
“All of these dynamic pieces seems to be fitting together for Elons goal of humans becoming a multi planetary species: A massive and robust reusable rocket system, electric vehicles, space based solar power generation, a planet wide communication system, large planetary scale AI infrastructure, boring machines for below surface infrastructure, etc.”
This I agree with. This was his intent, as a coherent system to fund and create his dream of a quarter century ago.
“Elon may soon have the money to push his vision forward significantly financed by the private sector.”
the government was not going to do it, and a side effect of accomplishing his vision is that many others are now pushing their own visions of space exploration and utilization in ways that governments worldwide failed to do for their citizens. The value of space has always been there, and space enthusiasts have been advocating for its development, but the governments were in charge and had their own priorities that had little to do with our priorities.
Musk has done more to privatize space than anyone else, and we are fortunate that the others are also able to advance the state of the art for many space related technologies, largely because commercial-space pioneers like Beck, Bezos, Kistler, Musk, and others pushed the vision until they overcame the governments’ monopolistic monopsonies.
Tesla is changing from a car + solar business to a robotics + solar business that might sell robotic cars, but mainly robots of other types. AI is key to the Tesla robot business. So merger could make sense, I suppose.
Edward,
Unfortunately, there is still a fair amount of reflexive anti-EV feeling in the more visceral and less intellectual parts of the MAGA Right. Even President Trump has said some completely stupid and fact-free things about EVs, especially EV trucks.
But you are quite correct that the main ideological objection was always about the subsidies. Elon, to his credit, has been urging an end to such subsidies for a long time. Tesla is really the only company that has figured out how to consistently make decent money building EVs. The only other company that makes any money at all on EVs is the PRC firm BYD and even its record of profits is mingy and spotty. It is also not a purely EV carmaker as it still produces more hybrid cars than EVs.
The rest of the world’s legacy automakers – and also all of the new EV-only automakers, including all of the other PRC outfits – lose money on every EV produced. That’s why the legacy makers are scaling back EV plans – which means they are effectively throwing in the towel on EVs as volume is the only way they’ll ever make money on the things. Newer all-EV companies like Rivian and Lucid have balance sheets that look like Countess Bathory’s bath towels.
Deplorable Dave,
Tesla will, very shortly, be an all-robot vehicle company. Some of them will walk on legs and the rest will roll on four or more wheels. All will be substantially autonomous in operation. The Tesla solar business will continue but has already long-since been surpassed by its energy storage business, ranging from home-scale to utility-scale.
Dick Eagleson,
I am sorry to hear that there is EV Derangement Syndrome going around the country. Unless the complaint is the long charging times, then that is still part of the economic cost of EVs. I see people it in their Teslas at charging centers in my area, waiting in their cars during the recharge. Fortunately, they seem to be using their smartphones during that amount of downtime. Another activity for charging is to go to lunch or dinner for the many minutes it takes to recharge.
I once did a calculation on the energy transfer rate at a fueling station (gas station) as 3 megawatts, although that did not take into account the low efficiency of an automobile’s entire system, but this is why you can refill a ten-gallon tank in three minutes or less. Much better than 20 minutes at a fast recharge station.
Here in California, electricity prices are extremely high, holding unsteady around 50¢ per kilowatt-hour, which leans toward the favor fossil fueled automobiles.
Tesla has shown that EVs can be made profitably, but the other auto manufacturers either are unwilling to do what it takes or are unable to do what it takes, perhaps due to contractual agreements (meaning with their employees). Charging stations are being built around the country, so the EV should become more convenient over time.
I think Deplorable Dave figured it out. Tesla is a robotics company that builds EVs, which are quickly becoming rolling robots (Full Self Driving – FSD). I purchased Tesla stock a couple years ago because of what I believe to be the potential for robots. Probably a mistake or even wishful thinking, but seemed to be the right thing to do at the time.
Note that last week Tesla announced shutdown of production for Model S and X. Those two lines in Cali are going to convert to Optimus robot production with the goal of a million/year by 2027 / 2028. GM’s peak production year was 1978 with 9.2 million built worldwide. Tesla built around 1.7 million EVs in 2024. Cheers –
I am one of those afflicted with “reflexive anti-EV feeling”. Although it’s more accurately called “reflexive anti battery-operated cars feeling”. All modern cars are electrically-operated, aren’t they? I mean the gas pedal connects to a computer, not a fuel valve. So electronics are fine. But battery power is a joke, when you have plenty of gasoline to go around. It’s a niche market. Or at least is was a niche market, now going extinct.
Edward,
Battery and charging technology continues to improve. For someone with a home charger who plugs in their EV and charges it overnight, reliance on public chargers will become only a once-in-awhile occurrence. There is no way an ICE car will ever be able to tank up from a home refinery.
Electricity prices in CA are, indeed, very high. But so is the price of gasoline and both are likely headed far higher under our beloved Gov. Hairgel. Both facts are products of wretched public policy and not intrinsic characteristics of either ICE or EV technology.
Deplorable Dave,
EV technology is neither a joke nor going extinct. It is simply a fundamentally better technology than ICE. Tesla Model 3s and Model Ys are now only modestly more expensive than a median ICE car and both are safer and have notably lower total costs of ownership.
There was a time when horse transport was still more convenient than the newfangled ICE cars, but that was a transitory interval. I’d say the comparable interval for EVs vs. ICE is about over.