Musk Reportedly Considers Merging SpaceX, Tesla, and xAI

In January 2026, media outlets reported that Elon Musk is examining possible mergers involving SpaceX, xAI, and Tesla as part of broader corporate strategy considerations.

Multiple scenarios have been discussed in these reports, including the possibility of combining SpaceX with xAI, or merging SpaceX with Tesla. These potential moves are being explored as SpaceX reportedly prepares for an initial public offering in the coming months.

One scenario described in the reports involves exchanging xAI shares for SpaceX shares, which would integrate the artificial intelligence company more closely with the space technology firm. Another scenario under review is a direct merger between SpaceX and Tesla, which would bring together the space and automotive businesses under a single corporate structure.

On January 21, 2026, two shell companies named K2 Merger Sub Inc. and K2 Merger Sub 2 LLC were established in Nevada, which has been interpreted as a preparatory step towards a potential merger among these companies. These developments follow previous investments by both SpaceX and Tesla into xAI, with SpaceX investing $2 billion in 2025 and Tesla providing $2 billion in January 2026.

What the numbers show

• xAI reportedly raised about $20 billion in Series E funding
• xAI's valuation was estimated at $230 billion
• A combined entity could reach a valuation between $1 trillion and $1.5 trillion
• SpaceX is reportedly planning an IPO by mid-2026, aiming to raise up to $50 billion

Despite widespread media attention, none of the involved companies—SpaceX, xAI, or Tesla—have issued public statements confirming that merger discussions are taking place. The lack of official confirmation leaves the status of any potential deal uncertain at this stage.

SpaceX's reported plans for an IPO by mid-2026 could influence the timing and structure of any corporate reorganization. The company is said to be considering raising up to $50 billion through the public offering, which may affect how any merger or consolidation is approached.

xAI, which has received substantial investments from both SpaceX and Tesla, recently completed a Series E funding round that brought in approximately $20 billion. The company's valuation was reported to be around $230 billion at the time of the fundraising.

Estimates suggest that if SpaceX, xAI, and Tesla were to combine, the resulting entity could be valued at over $1 trillion, with some projections reaching as high as $1.5 trillion before any IPO. However, these figures remain based on reported scenarios and have not been confirmed by the companies involved.

* This article is based on publicly available information at the time of writing.