According to Gizmodo, Elon Musk’s SpaceX is in talks for a potential merger with either his electric vehicle company, Tesla, or his artificial intelligence startup, xAI, ahead of a planned initial public offering. The IPO is reportedly targeting a mid-June debut, timed to coincide with a conjunction of Jupiter and Venus near Musk’s birthday. Legal entities in Nevada with “merger sub” in their names have been established, with SpaceX CFO Bret Johnsen listed as an officer. This comes as OpenAI is eyeing an IPO as early as Q4 of this year, and Anthropic has also held talks about going public. Musk is currently suing OpenAI and Microsoft for $134 billion, alleging breach of contract related to OpenAI’s shift away from its nonprofit origins.
The Business Play
So, what’s the actual strategy here? On paper, a SpaceX-Tesla merger could excite investors with a vision of integrated tech—rockets, cars, maybe even those space-based data centers Musk has mused about. But a merger with xAI? That’s a different beast. It would essentially use SpaceX’s IPO as a backdoor to take xAI public, making it the first major AI startup to get a big, glitzy Wall Street debut. Here’s the thing: if there’s an AI investment bubble, you want to get your company public and funded before it pops. This move would give Musk first crack at that massive pool of public-market money, beating his rivals to the punch.
The Personal Vendetta
Let’s be real, though. A huge part of this is personal. Musk’s feud with Sam Altman and OpenAI is legendary at this point. He co-founded it, left in 2018, and is now suing them. OpenAI’s recent blog post, “The Truth Elon Left Out”, claims Musk himself agreed the company needed to become for-profit and only walked away when they refused to merge with Tesla. Ouch. Now, imagine the narrative if Musk gets xAI to Wall Street first. He’d frame it as a total victory, like he built the better AI company and got it to the finish line faster. It’s not just business; it’s a very public grudge match.
Why This Is Risky
Merging fundamentally different companies is messy. SpaceX is a aerospace manufacturing and launch provider—a capital-intensive hardware business with government contracts. xAI is a software and research-focused AI startup. Tesla is a carmaker scaling into robotics and autonomy. Combining them creates a conglomerate that’s incredibly hard for investors to value. What’s the core business? And bundling xAI with SpaceX feels a bit like putting a shiny new accessory on a rocket to justify a higher price tag. It might work in a hype-driven market, but it raises big questions about focus and synergy. Is this about building a coherent company, or just winning a race?
