SpaceX Mega Merger
A tech titan awakes
Seemingly overnight the largest private company became 50% bigger, after SpaceX merged with xAI and X. This corporate colossus now exceeds $1.25tn in value putting them in prime position to IPO and sell their shares to the public. Notably this marks the end of the beginning for the SpaceX story, for them the hero’s journey has just begun.
Merger Benefits
SpaceX is leaning hard into AI, so partnering with a specialist company like xAI should accelerate their development process and increase product capability. To assist in this endeavor, SpaceX plan to create an orbital data center of unprecedented scale, consisting of a million satellites in Earth and solar orbit, with terawatts of compute power. Combining all these distant processing nodes into a coherent whole would be a herculean task without the help of xAI. For example, xAI’s Colossus 1 data center consists of 200,000 GPUs, too many to become coherent (i.e. work together) according to some industry experts. However, it went operational in early 2026, proving xAI has industry leading insight into achieving coherence at scale.
Currently xAI is building Colossus 2, which should push the number of processors to 1 million, but further expansion could prove difficult. There’s an AI arms race between big tech players, resulting in increased demand for electricity, as data centers steadily grow. Hence more power stations need to be built, which could take decades and never exceed the boundless demand from AI. Unfortunately this shortfall will increase the price of electricity, and drive up the operating cost for terrestrial AI centers. Fortunately SpaceX plan to launch 100GW of compute power a year, powered by solar energy, that’s 10 times cheaper... Considering SpaceX will build and launch these AI satellites at cost, this should create a strong competitive advantage for xAI, and enable endless expansion. Of course anything that benefits xAI will also assist X, who need tons of compute and depend on Grok.
SpaceX Snowball
SpaceX value could more than double after they IPO, giving them a market cap >$3tn. This will leave them well placed to merge with other Musk companies when needed.
“My companies are, surprisingly in some ways, trending towards convergence! ~ Elon Musk/X
This mega-merger should produce a broad range of benefits for SpaceX – operationally, financially and politically.
Operational Benefits
Currently Musk companies work independently, which multiplies his personal workload. Hence amalgamating them would allow Elon to concentrate on technical issues instead of attending management meetings.
Each company has a deep pool of talented personnel which could be transferred to where they are most needed. For example, SpaceX relies on a small cadre of ace engineers to troubleshoot tough technical problems, and their number could grow two or three times if ace engineers from other companies become available. This would add technical diversity and depth to the cadre, making them more effective when parachuted in to solve problems.
Financial Benefits
Some Musk companies are cash rich, while others require a constant stream of investment. After they merge capital can flow freely between them, eliminating the need for further stock offerings and dilution.
Goods and services are often traded between Musk companies, with a markup applied plus sales tax. Once merged these goods and services could be supplied at no cost or tax, making such transfers less complex and more financially efficient.
Political Benefit
“Double-digit [US GDP] growth is coming within 12 to 18 months. If applied intelligence is proxy for economic growth, which it should be, triple-digit is possible in ~5 years.” ~ Elon Musk/X
SpaceX, Tesla and xAI are leading suppliers of applied intelligence. If US GDP doubles, the SpaceX conglomerate will be at the heart of it. Hence the company will have enormous influence, making them far less likely to become a political target. SpaceX need a following wind to create sustainable settlements on the Moon and Mars, which should be possible if they become the central pillar of the US economy.
“There is possible future where Optimus [robots] and space AI vastly exceed the current goods & services output of Earth.” ~ Elon Musk/X
Big Picture
Elon Musk’s life mission is to make humanity a spacefaring civilization. This will require radical reduction in cost for all space systems, starting with spacecraft and AI, progressing to solar panels, subsurface habitats, electric vehicles and robots, then culminating with neural interfaces.
It was expedient for SpaceX to merge with xAI to synergize launch with AI capabilities. Likely SpaceX’s next partner will be Tesla to gain their solar generation, electric vehicle and robot technology. Musk wants to achieve as many milestones as possible with his Tesla stock bonus scheme, which could delay any merger with SpaceX for 3+ years. However, after 5 years SpaceX will need a serious amount of solar energy for the moon and Mars, plus AI vehicles and robots, putting Tesla top of their shopping list.
Initially Starships can be used as surface habitats but going underground has longterm benefits such as stable temperature, radiation protection and room to expand. Therefore as soon as SpaceX outgrows their Starship settlements they will buy The Boring Company, to keep everything inhouse. Lastly space settlers have to work fast under difficult conditions, so neural interfaces become a must. Neuralink should be the last acquisition, assuming Musk doesn’t think-up any more companies…
In Conclusion
Musk companies are gathering under the SpaceX banner, as they prepare for their campaign on the Moon and Mars. The final aggregate will be peerless in breadth and reach making its shares almost priceless.
We enter a strange new realm where SpaceX revenue will exceed the GDP of most countries – except the USA. This financial heft can achieve great things, let’s see how far it can take us...