Elon Musk has integrated social media platforms, artificial intelligence (AI) startups, satellite internet businesses, and rocket manufacturers under one roof, sparking investor speculation about whether Tesla might join.
According to previous media reports, SpaceX recently discussed the possibility of a merger with Tesla, but analysts are divided on whether such a deal is still likely to happen in the near future.
Over the past two days, Musk’s business empire has completed another historic integration. Finally, this 'disruptor' in the tech world has brought together social media platforms, artificial intelligence (AI) startups, satellite internet businesses, and rocket manufacturers under one roof.
Now, investors can't help but ask whether Musk will bring$Tesla (TSLA.US)$into the fold?
According to previous media reports, SpaceX recently explored the possibility of merging with Tesla. Analysts remain divided on whether such a deal could materialize in the near term.
Strategists at Baird, a U.S. financial services firm, said that acquiring xAI could put any deal involving SpaceX and$Tesla (TSLA.US)$on hold at least in the short term, as Musk's attention may now shift to SpaceX’s initial public offering planned for mid-June.
According to insiders, SpaceX is considering going public in June (around Musk’s birthday), potentially raising up to $50 billion, which could become the largest IPO in history. Its valuation is expected to reach $1.5 trillion, close to Tesla’s $1.6 trillion.
In its latest report, Baird wrote: 'Given the significant integration work ahead for xAI and SpaceX, we believe that even if it happens, bringing Tesla into the mix is unlikely to be a short-term event.'
'Regardless of whether this possibility exists, the overall expansion of Musk's companies will ultimately benefit Tesla, whether as an independent entity or as part of a merged entity,' he added.
However, Dan Ives, a well-known technology analyst at Wedbush, expects that$Tesla (TSLA.US)$and SpaceX collaboration may occur within 12 to 18 months, becoming the 'Holy Grail' needed for Musk to control more of the AI ecosystem.
'We anticipate more cross-collaboration between Tesla and SpaceX in the coming year, which is positive news for Tesla’s growth prospects,' Ives added.
In fact, the cooperative relationships among these companies began long ago. According to regulatory filings, SpaceX paid Tesla at least $2.5 million between 2024 and 2025 for commercial, licensing, and support agreements; meanwhile, Tesla paid SpaceX $800,000 in 2024 for the use of an aircraft owned by the aerospace company.
Additionally, xAI has spent over $620 million in the past two years purchasing$Tesla (TSLA.US)$Megapack batteries, used to power its data centers. Tesla will also integrate xAI's Grok chatbot into its electric vehicles and humanoid robots.
Is integration a good or bad thing?
Adam Jonas, a Morgan Stanley analyst who has written research reports on Tesla for over a decade, stated after the latest annual shareholders' meeting:$Tesla (TSLA.US)$"Tesla's relationship with xAI (both financially and strategically) determines Tesla’s long-term success, partly due to the natural synergies of data, software, hardware, and manufacturing within a recursive loop."
Brian Mulberry, Senior Client Portfolio Manager at Zacks Investment Research, believes that Tesla's energy business could serve as a 'good buffer' for operating cash flow, and Tesla could repurpose its automobile production lines to manufacture its own robots as well as SpaceX’s rockets and engines.
Of course, some remain skeptical about the integration. Gary Black, Managing Partner of The Future Fund, noted that a successful merger between Tesla and SpaceX might require Tesla to issue more shares, thereby diluting the equity of existing shareholders.
"Many existing institutional investors may be concerned about the uncertainty of 25% profits brought by space travel/communication businesses and could sell their shares." He added.$Tesla (TSLA.US)$Institutional shareholders expressed concerns about the 25% profit uncertainty brought by the space travel/communication business and would sell their shares, he added.
Looking to pick stocks or analyze them? Want to know the opportunities and risks in your portfolio? For all your investment-related questions,just ask Futubull AI!
Editor/Melody