With the news of a merger between SpaceX and xAI being confirmed earlier this week by CEO Elon Musk directly, the first moves of an umbrella company that combines all of the serial tech entrepreneur’s companies have been established.

The move aims to combine SpaceX’s prowess in launches with xAI’s expanding vision in artificial intelligence, as Musk has detailed the need for space-based data centers that will require massive amounts of energy to operate.

It has always been in the plans to bring Musk’s companies together under one umbrella.

“My companies are, surprisingly in some ways, trending toward convergence,” Musk said in November. With SpaceX and xAI moving together, many are questioning when Tesla will be next. Analysts believe it is a no-brainer.

SpaceX officially acquires xAI, merging rockets with AI expertise

Dan Ives of Wedbush wrote in a note earlier this week that there is a “growing chance” Tesla could be merged in some form with the new conglomeration over the next 12 to 18 months.

“In our view, there is a growing chance that Tesla will eventually be merged in some form into SpaceX/xAI over time. The viewis this growing AI ecosystem will focus on Space and Earth together… and Musk will look to combine forces,” Ives said.

Let’s take a look at the potential.

The Case for Synergies – Building the Ultimate AI Ecosystem

A triple merger would create a unified “Musk Trinity,” blending Tesla’s physical AI with Robotaxi, Optimus, and Full Self-Driving, SpaceX’s orbital infrastructure through Starlink and potential space-based computer, and xAI’s advanced models, including Grok.

This could accelerate real-world AI applications, more specifically, ones like using satellite networks for global autonomy, or even powering massive training through solar-optimized orbital data centers.

The FCC welcomes and now seeks comment on the SpaceX application for Orbital Data Centers.

The proposed system would serve as a first step towards becoming a Kardashev II-level civilization and serve other purposes, according to the applicant. pic.twitter.com/TDnUPuz9w7

— Brendan Carr (@BrendanCarrFCC) February 4, 2026

This would position the entity, which could ultimately be labeled “X,” as a leader in multiplanetary AI-native tech.

It would impact every level of Musk’s AI-based vision for the future, from passenger use to complex AI training models.

Financial and Structural Incentives — and Risks

xAI’s high cash burn rate is now backed by SpaceX’s massive valuation boost, and Tesla joining the merger would help the company gain access to private funding channels, avoiding dilution in a public-heavy structure.

The deal makes sense from a capital standpoint, as it is an advantage for each company in its own specific way, addressing specific needs.

Because xAI is spending money at an accelerating rate due to its massive compute needs, SpaceX provides a bit of a “lifeline” by redirecting its growing cash flows toward AI ambitions without the need for constant external fundraising.

Additionally, Tesla’s recent $2 billion investment in xAI also ties in, as its own heavy CapEx for Dojo supercomputers, Robotaxis, and Optimus could potentially be streamlined.

Musk’s stake in Tesla and SpaceX, after the xAI merger, is also uneven. His ownership in Tesla equates to about 13 percent, only increasing as he achieves each tranche of his most recent compensation package. Meanwhile, he owns about 43 percent of the private SpaceX.

A triple merger between the three companies could boost his ownership in the combined entity to around 26 percent. This would give Musk what he wants: stronger voting power and alignment across his ventures.

It could also be a potential facilitator in private-to-public transitions, as a reverse merger structure to take SpaceX public indirectly via Tesla could be used. This avoids any IPO scrutiny while accessing the public markets’ liquidity.

Timeline and Triggers for a Public Announcement

As previously mentioned, Ives believes a 12-18 month timeline is realistic, fueled by Musk’s repeated hints at convergence between his three companies. Additionally, the recent xAI investment by Tesla only points toward the increased potential for a conglomeration.

Of course, there is speculation that the merger could happen in the shorter term, before June 30 of this year, which is a legitimate possibility. While this possibility exists but remains at low probability, especially when driven by rapid AI/space momentum, longer horizons, like 2027 or later, allow for key milestones like Tesla’s Robotaxi rollout and Cybercab ramp-up, Optimus scaling, or regulatory clarity under a favorable administration.

Credit: Grok Imagine

The sequencing matters: SpaceX-xAI merger as “step one” toward a unified stack, with a potential SpaceX IPO setting a valuation benchmark before any Tesla tie-up.

Full triple convergence could follow if synergies prove out.

Prediction markets are also a reasonable thing to look at, just to get an idea of where people are putting their money. Polymarket, for example, sits at between a 12 and 24 percent chance that a Tesla-SpaceX merger is officially announced before June 30, 2026.

Looking Ahead

The SpaceX-xAI merger is not your typical corporate shuffle. Instead, it’s the clearest signal yet that Musk is architecting a unified “Muskonomy” where AI, space infrastructure, and real-world robotics converge to solve humanity’s biggest challenges.

Yet the path is fraught with execution risks that could turn this visionary upside into a major value trap. Valuation mismatches remain at the forefront of this skepticism: Tesla’s public multiples are unlike any company ever, with many believing they are “stretched.” On the other hand, SpaceX-xAI’s private “marked-to-muth” pricing hinges on unproven synergies and lofty projects, especially orbital data centers and all of the things Musk and Co. will have to figure out along the way.

Ultimately, the entire thing relies on a high-conviction bet on Musk’s ability to execute at scale. The bullish case is transformative: a vertically integrated AI-space-robotics giant accelerates humanity toward abundance and multi-planetary civilization faster than any siloed company could.

The Federal Communications Commission (FCC) has accepted SpaceX’s filing for a new non-geostationary orbit (NGSO) satellite system of up to one million spacecraft and has opened the proposal for public comment. 

The move formally places SpaceX’s “Orbital Data Center” concept into the FCC’s review process, marking the first regulatory step for the ambitious space-based computing network.

FCC opens SpaceX’s proposal for comment

In a public notice, the FCC’s Space Bureau stated that it is accepting SpaceX’s application to deploy a new non-geostationary satellite system known as the “SpaceX Orbital Data Center system.” As per the filing, the system would consist of “up to one million satellites” operating at altitudes between 500 and 2,000 kilometers, using optical inter-satellite links for data transmission.

The FCC notice described the proposal as a long-term effort. SpaceX wrote that the system would represent the “first step towards becoming a Kardashev II-level civilization – one that can harness the Sun’s full power.” The satellites would rely heavily on high-bandwidth optical links and conduct telemetry, tracking, and command operations, with traffic routed through space-based laser networks before being sent to authorized ground stations.

FCC Chairman Brendan Carr highlighted the filing in a post on X, noting that the Commission is now seeking public comment on SpaceX’s proposal. Interested parties have until early March to submit comments.

What SpaceX is proposing to build

As per the FCC’s release, SpaceX’s orbital data center system would operate alongside its existing and planned Starlink constellations. The FCC notice noted that the proposed satellites may connect not only with others in the new system, but also with satellites in SpaceX’s first- and second-generation Starlink networks.

The filing also outlined several waiver requests, including exemptions from certain NGSO milestone and surety bond requirements, as well as flexibility in how orbital planes and communication beams are disclosed, as noted in a Benzinga report. SpaceX noted that these waivers are necessary to support the scale and architecture of the proposed system.

As noted in coverage of the filing, the proposal does not represent an immediate deployment plan, but rather a framework for future space-based computing infrastructure. SpaceX has discussed the idea of moving energy-intensive computing, such as AI workloads, into orbit, where continuous solar power and large physical scale could reduce constraints faced on Earth.

Elon Musk’s Boring Company has signed a definitive agreement with Dubai’s Roads and Transport Authority to begin implementing the Dubai Loop. 

The project marks the Boring Company’s first tunneling project outside the United States.

The Boring Company signs Dubai Loop agreement

The Boring Company signed a partnership agreement with Dubai Roads and Transport Authority on the sidelines of the World Governments Summit 2026 to start the implementation of the Dubai Loop, as per the tunneling startup in a blog post.

The agreement was signed on behalf of Dubai RTA by Mattar Al Tayer, director general and chairman of the Board of Executive Directors, and on behalf of The Boring Company by James Fitzgerald, the startup’s global vice president of business development. Senior officials from both organizations were present at the signing ceremony.

The Dubai Loop project is intended to improve passenger mobility in high-density urban areas through underground vehicle tunnels designed for faster construction and lower surface disruption than conventional transport systems.

Pilot route and project scope outlined

The first phase of the Dubai Loop will consist of a 4-mile (6.4 km) pilot route with four stations linking the Dubai International Financial Centre and Dubai Mall. The pilot phase is expected to pave the way for a full network extending up to 14 miles (22.5 km) with 19 stations connecting the Dubai World Trade Centre, the financial district, and Business Bay.

The tunnels will have a diameter of 12 feet (3.6 meters) and will be dedicated to vehicle transport. Construction will rely on tunneling methods designed to reduce costs and minimize disruption to existing infrastructure.

The pilot phase is estimated to cost about $154 million, with delivery expected roughly one year after design work and preparatory activities are completed. The full Dubai Loop network is projected to cost approximately $545 million and would take around three years to implement.

Capacity targets and next steps

Mattar Al Tayer shared his excitement about the project, stating that the Loop system will be a qualitative addition to the city’s transportation system. “The project represents a qualitative addition to Dubai’s transport ecosystem, as it enhances integration between different mobility modes and provides flexible and efficient first- and last-mile solutions. 

“Studies have demonstrated the project’s efficiency in terms of capacity and operating costs, with the pilot route expected to serve around 13,000 passengers per day, while the full route is projected to have a total capacity of approximately 30,000 passengers per day,” he said. 

Steve Davis, president of The Boring Company, highlighted that the partnership aims to deliver safe and efficient tunneling solutions aligned with Dubai’s long-term mobility strategy.

“We are proud to partner with the Roads and Transport Authority, one of the world’s leading entities in adopting innovative solutions in the transport sector. Through this partnership, we look forward to delivering advanced, safe, and highly efficient tunnelling solutions that support Dubai’s vision for sustainable and future mobility,” Davis stated.