SpaceX is said to be considering a merger or partnership with Tesla or Elon Musk’s xAI company.

SpaceX is actively exploring strategic options, including a potential merger with electric vehicle manufacturer Tesla or a partnership with the artificial intelligence firm xAI. This comes as Elon Musk seeks to consolidate his expansive business empire.

According to reports from Reuters, SpaceX is assessing the viability of a collaboration with Tesla or xAI prior to a major stock market flotation. This move is being speculated as part of a larger strategy leading up to a potential Initial Public Offering (IPO).

Recently, it was revealed that Musk, currently the world’s richest person, is contemplating a stock market launch that could value SpaceX at an astonishing $1.5 trillion (£1.1 trillion). This IPO is allegedly being timed to occur in early summer, aligning with both Musk’s birthday and a significant planetary event.

Musk, who celebrates turning 55 on June 28, coincidentally shares this timing with a rare celestial alignment where Jupiter and Venus will appear near each other in the sky.

Among Musk’s ambitious plans for SpaceX is the innovative idea of establishing datacentres in space. These centres would execute complex computations for AI models, potentially benefiting xAI significantly if this vision materializes.

Additionally, Tesla’s advanced energy storage solutions may play a crucial role in powering these space-based datacentres by utilizing solar energy effectively.

Furthermore, Musk has hinted at the possibility of employing SpaceX’s advanced Starship rockets to transport Tesla’s Optimus robots to celestial bodies like the moon and, eventually, Mars. This could mark a significant leap in robotics and space exploration.

In an interesting development, two entities were registered in Nevada on January 21, both comprising the phrase “merger sub” in their titles. Notably, Bret Johnsen, the chief financial officer of SpaceX, is listed among the executives associated with these entities.

Recently, Musk made headlines by announcing that Tesla would cease production of its Model X SUV and Model S full-size sedan. This announcement has been interpreted by investors as Tesla shifting its focus away from its core electric vehicle production.

Plans have already been laid to convert the Fremont, California factory that produced the Model S and X. Musk indicated that it would now focus on developing Tesla’s forthcoming Optimus robot, signifying a strategic pivot in the company’s operational goals.

Making matters more complex, Tesla’s latest quarterly earnings report indicated declining vehicle sales and falling revenues. Musk has suggested that Tesla’s future now hinges heavily on advancements in AI and robotics.

The earnings report characterized the past year for Tesla as a significant transition—a shift from being predominantly focused on hardware to redefining itself as a physical AI-driven enterprise.

Following these updates, Tesla’s stock grew by as much as 4.5% in after-hours trading, rebounding from a 3.5% drop during regular trading. This fluctuation values the electric vehicle manufacturer at around $1.56 trillion.

If SpaceX moves forward with an IPO, it may aim to secure as much as $50 billion, potentially making it the largest IPO in history.

Musk is currently the largest shareholder of SpaceX, holding 42% of its shares, and he wields control over approximately 79% of the voting rights associated with these shares. The remaining shareholders include employees and private investors, who collectively own about 30%, as well as the Founders Fund, which holds 10.4%, Fidelity Investments at 10.2%, and Google Ventures possessing 7.4%.

In December, Johnsen communicated to SpaceX employees that the impending public offering could finance an “insane flight rate” necessary for the advancement of the Starship rocket and contribute to developing a potential lunar base.

Interestingly, former President Donald Trump has also expressed ambitions for a moon base, stating he would like to see it established before he wraps up his second term in office, scheduled for January 2029.