SpaceX is reportedly in discussions to merge with Elon Musk’s artificial intelligence company xAI ahead of a public offering planned for 2026, according to Reuters, a move that could consolidate SpaceX, Starlink, X, and the Grok chatbot under one roof.
Under a SpaceX–xAI combination described to Reuters, xAI shares would be exchanged for SpaceX shares, with some xAI executives potentially given the option to take cash instead of SpaceX stock.
Two entities were established in Nevada on January 21, 2026 that Reuters described as set up to facilitate a possible deal, with one listing SpaceX and its CFO Bret Johnsen as managing members and the other listing Johnsen as sole officer.
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SpaceX is so far the most valuable private company within Musk’s enterprise, priced at about $800 billion in a recent private share sale, with an IPO valuation “likely above $1 trillion.” xAI was valued at about $230 billion in November, and Tesla was most recently cited at about a $1.4 trillion market cap.
Prediction markets were pricing deal odds into the tape. Polymarket late Thursday showed a 48% chance of a SpaceX–xAI merger by mid-year versus 16% for a Tesla–xAI merger, per Reuters reporting.
SpaceX has also reportedly considered a merger with Tesla. This comes after the automaker disclosed it had agreed to invest about $2 billion in xAI.
Musk said in the recent Davos forum that the lowest-cost place for AI could be space within “two years, maybe three,” as rivals explore similar concepts, including Blue Origin’s satellite backbone plans and Google research efforts.
In addition, xAI reportedly has a Pentagon contract worth up to $200 million for Grok products and described growing AI integration across Starlink and Starshield, including classified satellite work under a US intelligence contract.
Information for this story was found via Reuters and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
