Key Points
- Tesla stock rose over 5% following reports of potential mergers with SpaceX or xAI.
- SpaceX is reportedly discussing a merger with xAI ahead of a planned IPO.
- Investors hope consolidation will help Musk focus on Tesla’s AI and robotics goals.
- Tesla recently committed to investing $2 billion directly into xAI. Musk previously merged xAI with the social media platform X to access data.
Tesla shares jumped more than 5% on Friday as exciting rumors circulated through Wall Street. Reports suggest that Elon Musk’s rocket company, SpaceX, is in talks to merge with his artificial intelligence startup, xAI. Even more surprisingly, Bloomberg reported that SpaceX might consider a merger with Tesla itself. Investors are thrilled at the idea, hoping that combining Musk’s scattered tech empire would help the billionaire focus and share resources more effectively.
Shareholders have wanted this kind of consolidation for a long time. They believe bringing these operations under one roof would help Tesla transition from a simple electric car manufacturer into a dominant player in AI and robotics.
Musk has set aggressive goals for Tesla, including starting production of the humanoid robot Optimus later this year and making self-driving cars available to half the U.S. population by late 2026. However, Musk frequently misses his own deadlines, and his involvement in politics often distracts him from the business. A unified company structure could calm these nerves.
The companies are already moving money between each other. Just this week, Tesla announced it would invest $2 billion into xAI. This move aims to improve Tesla’s self-driving software using xAI’s advanced technology. Musk has also merged businesses before; last year, xAI bought the social media platform X in a $45 billion deal to gain access to its valuable user data.
Money is flowing fast in Musk’s world. xAI recently raised $20 billion in funding, valuing the startup at $230 billion. Meanwhile, SpaceX is preparing for a blockbuster public offering later this year.
For Musk, the stakes are incredibly high. His massive pay package at Tesla depends on him hitting wild targets, including turning Tesla into an $8.5 trillion company. Investors seem to think a mega-merger might be the only way to reach that goal.
