SpaceX and xAI Close the Valuation Gap
Elon Musk’s business empire has taken on a new shape after SpaceX merged with artificial intelligence venture xAI, pushing the combined group’s valuation to $1.25 trillion (€1.06tn). The deal sharply narrows the gap with Tesla, now valued at about $1.58 trillion (€1.34tn), and marks a shift in where Musk’s wealth is concentrated. On paper, his stake in the space business now outweighs his holdings in the electric carmaker.
The merger values SpaceX at $1 trillion (€847bn) and xAI at $250 billion (€212bn). It follows last year’s move in which xAI acquired social media platform X in a stock deal, further tying Musk’s technology ventures together.
Tesla Faces Headwinds as Focus Shifts
Tesla has struggled to maintain its growth trajectory. Shares slipped early in 2026, down around 6% so far this year, after the company reported a 16% drop in vehicle deliveries and a 3% fall in revenue for 2025 — its first annual decline. Increased competition in China and Europe, combined with the removal of US electric vehicle tax credits, has squeezed the core car business.
Musk has responded by doubling down on future-facing projects. Tesla is pivoting toward robotaxi services and its Optimus humanoid robots, despite neither becoming a major revenue driver yet. The company has also confirmed it will end production of the Model S and X, which made up a small fraction of sales, and redirect those resources toward robotics.
Growth, Risk, and Regulatory Pressure
While Tesla recalibrates, SpaceX continues to dominate its field. It leads the global launch market, backed by major contracts with NASA and the US Department of Defense, and runs Starlink, a satellite internet network with more than 9,000 satellites and roughly nine million customers worldwide.
Musk says the SpaceX-xAI merger is designed to accelerate the development of space-based data centres, a long-term vision aimed at bypassing Earth’s energy limits. However, analysts caution that such ambitions face serious technical and financial hurdles, from radiation shielding to cooling systems and launch costs.
The merger also introduces new risks. xAI is under investigation in several countries over its Grok image generator, while regulators are scrutinising X for alleged algorithmic abuses. Legal experts warn these issues could eventually spill over into SpaceX’s global operations. For now, remaining private gives Musk greater control, but a future public listing would likely bring sharper questions about valuation, governance, and regulatory exposure.
