SpaceX is reportedly in advanced discussions to merge with artificial intelligence startup xAI. The talks could reportedly result in an agreement as soon as this week, though discussions remain ongoing.

The update was initially reported by Bloomberg News, which cited people reportedly familiar with the matter.

SpaceX and xAI advanced merger talks

SpaceX and xAI have reportedly informed some investors about plans to potentially combine the two privately held companies, Bloomberg’s sources claimed. Representatives for both companies did not immediately respond to requests for comment.

A merger would unite two of the world’s largest private firms. xAI raised capital at a valuation of about $200 billion in September, while SpaceX was preparing a share sale late last year that valued the rocket company at roughly $800 billion.

If completed, the merger would bring together SpaceX’s launch and satellite infrastructure with xAI’s computing and model development. This could pave the way for Musk’s vision of deploying data centers in orbit to support large-scale AI workloads.

Musk’s broader consolidation efforts

Elon Musk has increasingly linked his companies around autonomy, AI, and space-based infrastructure. SpaceX is seeking regulatory approval to launch up to one million satellites as part of its long-term plans, as per a recent filing. Such a scale could support space-based computing concepts.

SpaceX has also discussed the feasibility of a potential tie-up with electric vehicle maker Tesla, Bloomberg previously reported. SpaceX has reportedly been preparing for a possible initial public offering (IPO) as well, which could value the company at up to $1.5 trillion. No timeline for SpaceX’s reported IPO plans have been announced yet, however.

Tesla will build Optimus 4 in Giga Texas, and its production line will be massive. This was, at least, as per recent comments by CEO Elon Musk on social media platform X.  

Optimus 4 production

In response to a post on X which expressed surprise that Optimus will be produced in California, Musk stated that “Optimus 4 will be built in Texas at much higher volume.” This suggests that while the first Optimus line will be set up in the Fremont Factory, and while the line itself will be capable of producing 1 million humanoid robots per year, the real ramp of Optimus’ production will happen in Giga Texas. 

This was not the first time that Elon Musk shared his plans for Optimus’ production at Gigafactory Texas. During the 2025 Annual Shareholder Meeting, he stated that Giga Texas’ Optimus line will produce 10 million units of the humanoid robot per year. He did not, however, state at the time that Giga Texas would produce Optimus V4. 

“So we’re going to launch on the fastest production ramp of any product of any large complex manufactured product ever, starting with building a one-million-unit production line in Fremont. And that’s Line one. And then a ten million unit per year production line here,” Musk stated. 

How big Optimus could become

During Tesla’s Q4 and FY 2025 earnings call, Musk offered additional context on the potential of Optimus. While he stated that the ramp of Optimus’ production will be deliberate at first, the humanoid robot itself will have the potential to change the world. 

“Optimus really will be a general-purpose robot that can learn by observing human behavior. You can demonstrate a task or verbally describe a task or show it a task. Even show it a video, it will be able to do that task. It’s going to be a very capable robot. I think long-term Optimus will have a very significant impact on the US GDP. 

“It will actually move the needle on US GDP significantly. In conclusion, there are still many who doubt our ambitions for creating amazing abundance. We are confident it can be done, and we are making the right moves technologically to ensure that it does. Tesla, Inc. has never been a company to shy away from solving the hardest problems,” Musk stated. 

Elon Musk appeared to confirm reports that SpaceX is exploring a potential merger with artificial intelligence startup xAI by responding positively to a post about the reported transaction on X.

Musk’s comment follows reports that the rocket maker is weighing a transaction that could further consolidate his space and AI ventures.

SpaceX xAI merger

As per a recent Reuters report, SpaceX has held discussions about merging with xAI, with the proposed structure potentially involving an exchange of xAI shares for SpaceX stock. The value, structure, and timing of any deal have not been finalized, and no agreement has been signed.

Musk appeared to acknowledge the report in a brief reply on X, responding “Yeah” to a post that described SpaceX as a future “Dyson Swarm company.” The comment references a Dyson Swarm, a sci-fi megastructure concept that consists of a massive network of satellites or structures that orbit a celestial body to harness its energy. 

Reuters noted that two entities were formed in Nevada on January 21 to facilitate a potential transaction for the possible SpaceX-xAI merger. The discussions remain ongoing, and a transaction is not yet guaranteed, however.

AI and space infrastructure

A potential merger with xAI would align with Musk’s stated strategy of integrating artificial intelligence development with space-based systems. Musk has previously said that space-based infrastructure could support large-scale computing by leveraging continuous solar energy, an approach he has framed as economically scalable over time.

xAI already has operational ties to Musk’s other companies. The startup develops Grok, a large language model that holds a U.S. Department of Defense contract valued at up to $200 million. AI also plays a central role in SpaceX’s Starlink and Starshield satellite programs, which rely on automation and machine learning for network management and national security applications.

Musk has previously consolidated his businesses through share-based transactions, including Tesla’s acquisition of SolarCity in 2016 and xAI’s acquisition of X last year. Bloomberg has also claimed that Musk is considering a merger between SpaceX and Tesla in the future.