Elon Musk has once again fueled merger speculation after reports said SpaceX is exploring a potential tie-up involving xAI and Tesla Inc. as it prepares for what could be one of the largest IPOs in history.
SpaceX, xAI And Tesla: Merger Talk Gains Momentum
SpaceX has reportedly been holding internal discussions around a possible merger involving Tesla and xAI. The space exploration company is reportedly targeting an IPO as early as June at a valuation of around $1.5 trillion, a move that would instantly make it one of the most valuable publicly traded firms in the world.
Gene Munster Breaks Down The Odds
On Thursday, Deepwater Asset Management’s managing partner Gene Munster weighed in on the situation, calling it a classic example of “Elon thinking big.” Munster outlined his view of how the scenario could play out over the next three years, assigning a:
- 45% chance that Tesla acquires xAI
- 35% chance SpaceX buys xAI
- 20% probability that xAI remains independent
“My take: Investors would likely approve the deal (either SpaceX or Tesla buying xAI) because it’s Elon thinking big, future versions of Colossus belong in space,” Munster said.
Investment and Merger Implications
Both SpaceX and Tesla have already invested $2 billion each into xAI. This investment highlights the strategic importance of xAI’s technology to both companies. Munster said Musk’s companies “will always play nice with each other,” outlining how each could benefit from xAI.
- SpaceX wants xAI to power datacenters “in the sky”
- Tesla wants xAI for Grok, its chatbot, for Full Self-Driving software and the Optimus humanoid robot program
“If SpaceX buys xAI, Tesla will still get access to Grok,” Munster added.
Investor Insights
Investor Chamath Palihapitiya also weighed in on the potential merger, saying that a merger between SpaceX and Tesla would instantly create a modern-day Berkshire Hathaway.
“If this were to happen, it would also bring us one step closer to having one equity instrument for all things Elon which many would want to buy,” he said.
IPO Timing And Market Bets
Prediction market Kalshi shows strong belief that SpaceX will announce an IPO before mid-2026.
Price Action
Tesla shares closed down 3.23% at $416.57 and rebounded by 2.86% in overnight trading to $428.50. TSLA maintains a stronger price trend over the medium and long terms, with a poor value ranking.
Key Points to Consider
- Elon Musk is exploring a potential tie-up between SpaceX, xAI, and Tesla Inc.
- SpaceX is targeting an IPO as early as June at a valuation of around $1.5 trillion.
- Gene Munster assigns a 45% chance that Tesla acquires xAI, a 35% chance SpaceX buys xAI, and a 20% probability that xAI remains independent.
- Investors are weighing in on the potential merger, with some seeing it as a strategic move for all parties involved.