Elon Is Merging SpaceX And xAI

This may be the most ambitious move Elon Musk has ever made. Why? Because it reshapes the landscape of space technology, artificial intelligence, and energy solutions. And not just that. It could be the first piece of a much larger puzzle that changes how we view Elon’s businesses as a whole.

THE MERGE

So, SpaceX officially announced the acquisition of xAI, Elon Musk’s generative AI company. With this merger, what is born, in his own words, is “the most ambitious innovation engine, on and beyond Earth.” His vision? AI computing centers in orbit, space-based networks, direct-to-mobile communications, and a “sentient artificial intelligence” that, as he says, will extend the light of consciousness to the stars.

Musk states clearly that Earth-based solutions for the massive computing power required by AI models have reached their limits. And that within two to three years, the most efficient and cost-effective way to run these models will be in space. There, solar energy is abundant, cooling costs are effectively zero, and available space is almost unlimited. The target? One hundred gigawatts of computing power per year. He does not rule out reaching one terawatt in the longer term.

Whether all of this is realistic is another discussion. Analysts point out huge technical and legal challenges. But no one doubts that if anyone can attempt it, it’s Elon.

THE ROLE OF TESLA

And this is where Tesla comes in.

A few days ago, Tesla announced a two billion dollar investment in xAI, participating in its latest funding round. Elon himself said that “shareholders asked for it,” but the reality is that Tesla is already using xAI’s Grok to coordinate its fleet. This is a clear strategic linkage. Tesla’s CFO stated plainly, “If xAI can accelerate us, why wouldn’t we do it?”

And he’s right. Tesla is no longer just an electric car company. It is a platform for robotics, autonomy, and energy. Optimus robots, robotaxis, energy solutions, and energy storage form a new face of Tesla, and that face needs AI.

ELON’S VISION

The most interesting dimension, however, is where all of this is heading overall. And here, the picture becomes clearer and much bigger.

Analysts such as Wedbush, William Blair, and Ross Gerber see one thing: unification. They believe Elon Musk is not simply making strategic moves, but executing his grand plan to merge his companies into a single giant under the “X” umbrella. A super-company that integrates space technology, artificial intelligence, robotics, energy systems, and autonomous vehicles. A technology colossus with vertical integration across all the core sectors of the future.

Some, like Ross Gerber, even envision a shared stock ticker on the New York Stock Exchange, the letter “X.” That is, SpaceX, xAI, Tesla, and even the social platform X, formerly Twitter, all united under one legal and operational entity. The ultimate mega-conglomerate of the future.

And the question is: why now?

The answer may lie in Elon’s personal incentive. According to the new compensation package approved by Tesla shareholders, Musk could earn one trillion dollars, yes, 1,000,000,000,000 dollars, if he manages to bring Tesla’s market capitalization to 8.5 trillion dollars by 2035. At the moment, Tesla stands at around 1.5 trillion. So what does that mean? It requires more than a fivefold increase.

But how does he get there?

Tesla’s core activities today, cars and solar panels, have limited potential for something that massive. But if artificial intelligence, space infrastructure, and the narrative of a unified innovation empire are integrated, then the game changes. Then we’re talking about something entirely different. A company that embodies the entirety of the technological future.

This may be the only way to reach 8.5 trillion and activate Elon’s one trillion dollar reward. And that’s why, it seems, he is planning to merge everything.

Or maybe the balance sheets of xAI are simply terrible, and since SpaceX has government contracts and therefore stronger financials, this move allows the losses of X to be hidden through accounting.