SpaceX, Tesla, and xAI Merger Talks Intensify Amid Terafab Launch

Recent developments involving SpaceX, Tesla, and xAI have brought renewed attention to the possibility of a merger among Elon Musk’s companies, following several high-profile strategic moves and ongoing industry speculation.

SpaceX completed the acquisition of xAI, an artificial intelligence startup founded by Elon Musk, through an all-stock transaction. This move resulted in xAI becoming a wholly owned subsidiary of SpaceX, consolidating their operations under one corporate structure.

The combined valuation of SpaceX and xAI reached approximately $1.25 trillion after the acquisition. This figure reflects the scale of the companies’ joint activities in sectors including aerospace and artificial intelligence.

On March 21, 2026, Elon Musk announced the Terafab project, which is a collaborative semiconductor manufacturing initiative involving Tesla, SpaceX, and xAI. The project aims to deliver more than one terawatt of AI computing capacity annually, signaling a coordinated approach to advancing AI hardware capabilities.

What the numbers show

• The SpaceX-xAI entity is valued at about $1.25 trillion
• Terafab was announced on March 21, 2026
• Terafab targets over one terawatt of AI compute capacity each year

Media outlets have reported ongoing discussions regarding a potential combination of Tesla with the newly formed SpaceX-xAI entity. These discussions include possible merger or acquisition scenarios, which could take place either before or after a public offering.

Bloomberg reported that SpaceX is considering a merger with either Tesla or xAI as it prepares for a possible initial public offering in mid-2026. This report aligns with other media coverage highlighting the evolving relationship among the companies.

Simply Wall St stated that speculation about a merger between Tesla and SpaceX has increased, particularly following the announcement of the Terafab project. The joint venture is viewed as a factor influencing ongoing merger discussions within the industry.

Industry reaction

Analyst Dan Ives of Wedbush Securities stated there is a growing chance that Tesla could merge in some form with the combined SpaceX-xAI entity within the next 12 to 18 months. This assessment was based on recent corporate developments and public announcements.

Multiple media sources have reported that discussions about merging or acquiring Tesla with the SpaceX-xAI entity are ongoing, with various scenarios under consideration as the companies plan for future strategic moves.

* This article is based on publicly available information at the time of writing.