Musk’s SpaceX Explores Merger with xAI or Tesla Ahead of Historic IPO

California: SpaceX is exploring potential mergers with either xAI or Tesla ahead of a planned initial public offering that could become the largest in history, according to reports Thursday.

The rocket manufacturer is in discussions to merge with Elon Musk’s artificial intelligence startup xAI before going public later this year, Reuters reported, citing sources and regulatory filings. Under the proposal, xAI shares would be exchanged for SpaceX stock. Separately, Bloomberg reported SpaceX is also considering a combination with Tesla.

An xAI and SpaceX merger would combine SpaceX’s rockets and Starlink satellites with the X social media platform and Grok AI chatbot, advancing Musk’s vision of launching orbital data centers for AI development. At Davos last week, Musk said space represents the lowest-cost location for AI infrastructure.

SpaceX is targeting a summer IPO that could value the company at one-point-five trillion dollars and raise fifty billion dollars. The company reached an eight-hundred-billion-dollar valuation in a recent private sale. XAI closed a twenty-billion-dollar Series E round earlier this month at a two-hundred-thirty-billion-dollar valuation.

No final decisions have been made, and the companies could remain separate. Tesla shares rose three to four-point-five percent in after-hours trading following the reports.