Musk Super Complex: SpaceX + xAI … + Tesla?
The two major private giants under Musk have officially merged, and the market's attention has quickly shifted to the final piece of the puzzle—Tesla.
According to Chasewind Trading Desk, SpaceX recently announced that it has acquired Musk’s artificial intelligence company xAI. This move comes as SpaceX plans to hold its first IPO in mid-year. HSBC’s latest research report shows that the valuation of the merged entity will reach about $1.25 trillion, with SpaceX valued at about $1 trillion and xAI at about $250 billion.
Musk confirmed the news on the SpaceX website, stating that the move aims to create “the most ambitious vertically integrated innovation engine on Earth (and beyond).” He further elaborated in a blog post that the grand goal is to drive AI applications through a satellite network that “utilizes all the energy of the sun,” thereby “accelerating humanity’s future.”
This blockbuster news quickly triggered chain reactions in capital markets, with market attention turning to Tesla. Afterwards, on the prediction market Polymarket, the probability of the contract regarding “Tesla and SpaceX announcing a merger before June 30” soared from around 15% before the news to around 24%.
Although Tesla’s stock price only slightly increased at Tuesday’s close, discussions about its future ownership have become one of Wall Street’s hottest topics.
Tesla: The Final Piece of the Puzzle?
Tesla disclosed a $2 billion investment in xAI during its Q4 earnings call and emphasized AI-related opportunities such as Robotaxi and humanoid robots.
Wedbush analyst Dan Ives wrote in a Tuesday report, “Over time, the likelihood of Tesla eventually merging with SpaceX/xAI in some form is increasing.”
He believes, “Musk wants to own and control more of the AI ecosystem, step by step. The Holy Grail may be combining SpaceX and Tesla in some form over the next 12 to 18 months to provide a connective tissue for these two disruptive tech giants seeking to lead the AI revolution.”
Investopedia reported that speculation on social media has been rampant. Some users pointed out that if Musk acquired the NYSE ticker symbol “X” (originally US Steel), it might be to prepare for a merger between Tesla and SpaceX/xAI.
HSBC: Capital Needs May Be the Key to Integration
Amid heated market discussions on business synergies, a new HSBC research report provides a cooler analysis from the perspective of capital needs.
HSBC analyst Michael Tyndall, in a report titled “SpaceX Acquisition of xAI Raises Questions—Will TSLA Join?” pointed out that while a merger is not yet certain, “we suspect the answer lies in the need for capital.”
The HSBC report, citing Bloomberg data, says that the merger’s stock swap ratio is 1 xAI share for 0.1433 SpaceX shares.
Analysts note that Tesla has planned to double its capital expenditures (Capex) year-on-year by 2026, and suggest that such high investment will continue for some time, and will need to be financed through ‘other means’.
Therefore, whether it’s the massive investment needed for xAI to rival OpenAI, or the construction of the space solar supply chain, huge additional capital will be required. The report suggests that “rolling up” the three companies (SpaceX, xAI, Tesla) could become a solution.
The report mentions that Musk said at a shareholders’ meeting: “I do really want to figure out some way for Tesla shareholders to participate in SpaceX.”
HSBC analysts concluded that, considering the enormous demand these three ventures place on CEO Musk’s energy, integrating them may even be the preferred ‘management alternative’ for some shareholders.
Key Issue Facing the Merger: Valuation Mismatch
Despite the grand vision, Wall Street isn’t without reservations. Gary Black, co-founder of Future Fund Active ETF, pointed out a key issue with a full merger: valuation mismatch.
“The math is very straightforward,” Gary Black says. He estimates that Tesla is currently trading at about 200 times estimated 2026 earnings, while SpaceX, at its current valuation, is trading close to 400 times.
This means that, to merge at current valuations, Tesla would need to issue about 35% more shares.
Black warns, “Many current institutional Tesla shareholders may be hesitant about the uncertainty of 25% profits coming from space travel/communications and could sell their Tesla shares.”
Building a "Space Cloud": The Business Logic of the Merger
The move by SpaceX and xAI is not without precedent; its core logic lies in the combination of computing power and energy.
According to Barron's, SpaceX is planning to build a “space cloud” of up to one million satellites, aiming to use the vacuum environment of space and solar power to solve the electricity supply and cooling bottlenecks faced by terrestrial AI data centers.
James Bruegger, Chief Investment Officer of space technology investment firm Seraphim Space, stated in an email: “Elon Musk’s plan is to use this deal to support SpaceX’s future public market ambitions and help fund a satellite-based data center constellation, highlighting the enormous scale of future plans.”
If SpaceX is evolving into an AI data center company, then merging it with xAI, which is valued at about $200 billion in recent funding rounds, makes perfect sense commercially.
~~~~~~~~~~~~~~~~~~~~~~~~
The above excellent content is from Chasewind Trading Desk.
For more detailed interpretation, including real-time analysis and frontline research, please join [Chasewind Trading Desk Annual Membership]
Risk Disclosure and DisclaimerThe market has risks, investment requires caution. This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific situation. Invest at your own risk.