By Deborah Sophia
Shares of Tesla TSLA.O jumped more than 5% on Friday, after reports that SpaceX was in deal talks with Elon Musk’s other companies stoked investor hopes that the billionaire’s tech empire could be unified further.
SpaceX is in discussions to merge with Musk’s AI startup, xAI, ahead of a blockbuster public offering planned for this year, Reuters reported on Thursday. Separately, Bloomberg also reported that SpaceX is considering a merger with Tesla TSLA.O.
While Musk’s companies are already interlinked, Tesla investors have long advocated for more consolidation, hoping that bringing different operations under one roof would allow Musk to keep a sharper focus on the EV maker’s business as it aims to transform into an AI and robotics player.
Musk has laid out ambitious goals for Tesla, including making autonomous vehicles accessible to up to half the American population by the end of 2026 and starting production of the humanoid robot Optimus toward the end of this year.
But with Tesla rarely sticking to Musk’s delivery timelines, and with the tech entrepreneur’s involvement in political affairs, shareholders have been worried.
Earlier this week, Tesla said it would invest $2bn in xAI, in a move that is expected to boost Tesla’s autonomous driving and humanoid robot ambitions, at a time when its core EV sales business has sagged.
Last year, the Tesla board announced a $1-trillion pay package for Musk, tied to lofty operational and valuation milestones, including hitting a market capitalisation of $8.5-trillion. The plan has also won shareholder approval.
Meanwhile, Musk has already been merging his businesses — last year, xAI bought X in a $45bn deal, giving the AI firm access to the social media platform’s data and distribution.
This month, xAI raised $20bn in a funding round, exceeding its $15bn target at a valuation of $230bn. The AI startup also received a $2bn investment commitment from SpaceX as part of a $5bn equity fundraising, the Wall Street Journal reported last year.
Reuters
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