In Elon Musk’s mind, Tesla and SpaceX have already merged. Why not make it official?

“My companies are, surprisingly in some ways, trending towards convergence,” Tesla, SpaceX, and xAI CEO Elon Musk wrote on his social media platform, X, back in November after a shareholder vote for Tesla to invest in xAI fell short. 

Since then, Musk’s companies have converged even more.

The investment happened anyway, as Tesla poured $2 billion into xAI. SpaceX, which is reportedly preparing to go public this summer in one of the biggest IPOs ever, merged with xAI. And Musk increasingly speaks of SpaceX and Tesla not as separate companies but as pieces of the same technological stack working toward similar goals, like putting solar-powered data centers in space. In the end, it’s all part of the infrastructure necessary for a multiplanetary, AI-enabled civilization, right?

Earlier this month, Musk said he thought Tesla — the $1.2 trillion EV company whose mission he’s long been trying to shift toward self-driving and humanoid robots, not his actual artificial intelligence business, xAI — would be one of the first companies to reach artificial general intelligence. Just last week, Musk announced that Tesla and xAI would work together on a joint AI agent project (one “capable of emulating the function of entire companies”) that had previously been the province of xAI. Tesla also quietly converted its shares of xAI into SpaceX, formalizing an ownership stake in the company.

Musk may already be telling us how his empire looks inside his mind: less a collection of companies than a single integrated system. The reasons it makes sense are becoming too numerous to ignore, and the convergence Musk described is already underway.

So why not just merge Tesla and SpaceX and make it official?

“My contrarian belief is I don’t think SpaceX will IPO,” SPAC king Chamath Palihapitiya said on his podcast last month. “I think that it will reverse merge into Tesla, and I think Elon will use it as a moment to consolidate control and power of his two seminal assets into one cap table.”

Consolidating power and control sure sounds like Musk — he combined Tesla and SolarCity in 2016, he combined X and xAI in March 2025, and he combined xAI and SpaceX just last month. And don’t forget: during the process of merging xAI and SpaceX, Bloomberg reported that SpaceX and Tesla were also considering a merger. 

And there may be no better regulatory environment for merging these two giant companies than now. The current administration is vocally hands-off on regulation, and it’s run by Donald Trump, who remains a pal of Musk’s despite their tiffs. 

Here are some of the reasons it makes sense for Musk to put his companies together under one roof (which will probably be painted with some childish slogan).

Tesla’s getting tired

For years, Tesla was one of the hottest investor stories in the stock market, a rocket ship for retail investors who got to brag about big gains. But for the past three years, the stock’s momentum has curbed — from a 102% gain in 2023, to 63% in 2024, to 11% in 2025. Last year’s gain in Tesla was less than the S&P 500’s. So far in 2026, Tesla’s down nearly 15% through Thursday’s close.

Though it still acts like a high-growth company, its main revenue engine — car sales — and overall revenue are shrinking. Musk has acknowledged that Tesla’s future isn’t EVs, and he even moved to cut two of Tesla’s models from production recently. Instead, he says, Tesla will be about AI and autonomy. But those bets are likely to take money rather than make it for the foreseeable future. Tesla’s driverless ride-hailing business doesn’t meaningfully exist yet, and its Optimus robots, which Musk has said will be one of the most successful products in human history, are even farther out on the horizon.

Enter SpaceX, whose satellite internet business is booming and which is exploring other lucrative revenue streams. Its valuation is surging: it was valued at $1.25 trillion last month, and now there’s speculation it could seek a valuation higher than $1.75 trillion.

If Tesla were to swallow up SpaceX, it could again become a growth story. (Or at least its stagnating car sales could be masked by stashing them among a growing business line.) 

“This growing AI ecosystem will focus on Space and Earth together… and Musk will look to combine forces/technologies over time,” Wedbush Securities analyst Dan Ives wrote in a February note, saying he thinks Tesla and SpaceX will eventually merge. “Tesla now is laser focused on autonomous and robotics in this key era for Musk & Co. and we expect more cross-pollination between Tesla and SpaceX over the coming year, which is bullish for the Tesla story in our view.”

The world’s richest man could consolidate more control over one of the world’s biggest companies

A merger wouldn’t just be about strategy; it would also enhance Musk’s control.

He owns a much larger stake in SpaceX than he does in Tesla. In a stock deal, that ownership would convert into additional Tesla shares, increasing his influence over the combined company and giving him a firmer grip on its direction — and its eventual robot army.

It would also instantly bulk up Tesla’s size. Currently hovering around the world’s 10th-most-valuable company, a combined Tesla-SpaceX would vault into the very top tier, a not insignificant outcome for a CEO who already sits atop the global wealth rankings, and a shift that would carry both financial and symbolic weight.

More importantly, the deal would amplify what Tesla already is in the market: a bet on Musk. The ultimate meme stock, Tesla has long traded as much on his ambition as on its earnings. Adding SpaceX would only intensify that dynamic. Electric vehicles, rockets, satellite networks, humanoid robots, and Mars colonization — all under a single ticker — is the kind of story that’s hard for retail investors to ignore.

That doesn’t mean Musk would immediately unlock more from his trillion-dollar max pay package. Its structure ties payouts to market cap and financial performance, and excludes gains driven purely by large acquisitions. But a larger, more integrated Tesla could make those targets easier to hit over time by combining resources, technology, and revenue streams across the business.

Tesla and SpaceX sure sound like the same company lately

As we mentioned, SpaceX and Tesla are sounding increasingly the same when Musk muses about them. Functionally, they already overlap in leadership, personnel, and investments, a cross-pollination that has raised investor concern over the years.

“ If it’s all one entity, then you can freely move people back and forth,” Morningstar analyst Seth Goldstein told Sherwood News. “There’s less concern about self-dealing.”

They have also collaborated directly — including in 2018, when SpaceX launched Musk’s personal Tesla Roadster into orbit on the first Falcon Heavy test flight. Musk has said SpaceX’s Starship could eventually carry Tesla’s Optimus robots to Mars on early missions. In that vision, Tesla supplies the labor force and SpaceX supplies the transport. 

SpaceX’s aim to build data centers in space could be supported, at least in part, by Tesla’s solar panels and batteries — technology Musk has suggested could eventually be deployed off-planet.

Back on Earth, Tesla has already begun integrating xAI’s Grok into its vehicles as a conversational assistant, while also tapping SpaceX’s Starlink network to connect Tesla Superchargers in hard-to-reach places. The xAI Tesla Macrohard project is only the latest in a long line of collaborations across Musk’s companies.

“We don’t think investors understand just how important xAI is to Tesla and the broader Muskonomy,” Morgan Stanley Adam Jonas wrote in a note following the unsuccessful vote in November for Tesla to invest in xAI. “Tesla’s relationship with xAI (financially and strategically) is deterministic to the long-term success of Tesla due in part to the natural synergies of data, software, hardware, and manufacturing in recursive loops.”

Meanwhile, SpaceX and Tesla’s missions are both equally grand and far-fetched. SpaceX’s includes “scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars,” while Tesla says it’s “building a world of amazing abundance.”

A SpaceX IPO would double Musk’s reporting requirements 

A single company would also simply be easier for the world’s wealthiest and busiest man.

It’s no secret that Musk hates publicly reporting his companies’ finances. He famously threatened to take Tesla private, citing a “quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term.”

An IPO would bring that same pressure to SpaceX, which has so far enjoyed the lighter reporting requirements of a private company.

By merging the companies instead of taking SpaceX public, Musk could maintain one set of reporting requirements rather than two. And a deal would give SpaceX access to public markets much like a SPAC-style listing — by becoming part of an already listed company — while avoiding the IPO road show process.

Doing an M&A deal instead of an IPO could also save Musk money, as merger fees are typically lower than IPO fees.

But are there 50 billion drawbacks?

There are plenty of reasons why a merger might make sense. Among the potential drawbacks: if SpaceX really needs the capital it was planning to raise in an IPO (and some reports say it plans to raise a whopping $50 billion), it would have to find another way to get access to that cash. 

Still, Musk said in December that SpaceX “has been cash flow positive for many years and does periodic stock buybacks twice a year to provide liquidity for employers and investors.” 

That suggests it doesn’t have an urgent need for capital — and in a merger, those employees and investors would instead get highly liquid Tesla stock. Plus, Tesla has more than $44 billion in cash on its balance sheet and has repeatedly tapped markets to raise billions through stock and debt. SpaceX, for its part, has raised nearly $12 billion as a private company, according to Crunchbase.

To be sure, the most likely outcome is still a blockbuster SpaceX IPO this summer, surrounded by hype and investor demand.

But don’t tell us Musk hasn’t at least thought about finally pulling his entire empire together and calling it something like “TeslaX” or “XXX.”