"Trillion IPO imminent, Musk reportedly talks merger of SpaceX and Tesla, Inc. (TSLA.US)! Is 'Elon Inc.' super empire about to emerge?"

As SpaceX's IPO countdown begins, discussions about the potential merger between SpaceX and Tesla, Inc. are becoming more real, moving from market rumors to more concrete talks. According to reports, the world's richest man, Elon Musk, has discussed the possibility of merging SpaceX with Tesla, Inc. with colleagues. As SpaceX is expected to officially debut on the Nasdaq in just over two weeks, speculations about "Musk eventually merging the two core companies into one" are spreading on Wall Street. Paving the way for the largest IPO in history SpaceX's IPO is undoubtedly the most anticipated event in the global capital markets in 2026. On May 20th, SpaceX officially submitted its prospectus to the U.S. Securities and Exchange Commission, planning to debut on the Nasdaq under the ticker symbol "SPCX" and seeking a dual listing with the Nasdaq Tech Exchange. The roadshow will begin on June 4th, pricing on June 11th, and officially listing on June 12th. The valuation target for this IPO is quite astonishing. Market estimates suggest that SpaceX's target valuation is between $17.5 trillion and $20 trillion, with a fundraising size of up to $75 billion to $80 billion. If successful, this will be the largest IPO in global financial history, surpassing by more than double the $29.4 billion raised by Saudi Aramco in 2019. The lead underwriters include Deluxe Corporation, Goldman Sachs Group, Inc., Morgan Stanley, JPMorgan, Bank of America Corp., and Citigroup. SpaceX has already achieved a valuation of $1.25 trillion in the private market, thanks to its comprehensive acquisitions of xAI and the X social platform earlier this year. Through this all-stock, tax-free transaction, SpaceX (valued at $1 trillion at the time) incorporated xAI (valued at $250 billion) established just two years ago into its portfolio. The post-merger SpaceX is divided into three major sectors: space, connectivity, and artificial intelligence. The prospectus discloses that in the 2025 fiscal year following the merger, SpaceX's total revenue reached $186.7 billion, adjusted EBITDA was $65.8 billion, but ultimately experienced a net loss of $49.4 billion. The main reason for the loss was the massive investment in the AI sector - xAI's capital expenditures in 2025 amounted to $12.73 billion, primarily used to purchase NVIDIA Corporation chips and build the Colossus supercomputing center in Memphis, which resulted in a $6.36 billion operating loss for the AI division that year. Moving into 2026, AI-related investments have increased even further, with the AI sector accounting for over three-quarters of the company's total $10.1 billion capital expenditure in the first quarter. Meanwhile, Tesla, Inc. currently has a market value of approximately $1.6 trillion. This means that after SpaceX goes public, Musk will simultaneously lead two of the top ten largest companies in the U.S. market cap-wise. It is this unprecedented height that has dramatically expanded the imagination of a potential merger. Rumors from internal discussions to public speculation The reason why rumors of a merger have garnered far more attention than before is that Musk himself is believed to be involved in discussions on this topic. According to sources, SpaceX and Tesla, Inc. have shared a series of resources, and Musk has discussed the possibility of integrating the two companies with colleagues. Although there have been constant rumors in recent months, Musk's involvement undoubtedly makes this prospect seem more realistic. What's even more noteworthy is that this topic has long been a topic of discussion within Tesla, Inc. An employee of Tesla, Inc. stated that many employees have long been expecting such a transaction to happen, and the topic has been openly discussed internally. Another source close to the company pointed out that the common challenges faced by both companies in terms of power and computing constraints have prompted them to collaborate frequently in recent years. Thomas Tonguz, a former engineer currently a venture capital investor at Theory Ventures, succinctly summarized it: "Tesla, Inc. must operate powerful AI systems in moving vehicles, while facing strict constraints on power, heat dissipation, latency, reliability, and cost. SpaceX, on the other hand, must consider orbital computing, where radiation, thermal cycles, launch mass, power generation, and heat dissipation are crucial design constraints." In his view, both companies are essentially dealing with computing challenges under extreme conditions. Resource sharing and personnel intertwining The convincing power of the merger rumors stems from the deeply intertwined resource networks between SpaceX and Tesla, Inc. On the personnel front, the seamless overlap of roles between the two companies is noteworthy. Musk serves as a director for both companies, with his brother, Kimbal, serving as a director at Tesla, Inc., having previously served on the SpaceX board. Ella L. Alzina, founder of DBL Partners, also serves on the boards of both companies, while SpaceX board members Antonio Gracias and Steve Jurvetson have previously served on the Tesla, Inc. board. Charles Kuehn even serves as Vice President of Materials Engineering for both Tesla, Inc. and SpaceX, having made a name for himself as a senior engineer who came to SpaceX ten years ago from Apple Inc. Notably, Kuehn has contributed significantly to solving critical design challenges. On the capital side, Tesla, Inc. announced a $2 billion investment in xAI in January of this year. The following month, with SpaceX and xAI completing the merger, the Tesla, Inc. xAI shares were converted into SpaceX holdings, making Tesla, Inc. one of SpaceX's shareholders. While this ownership stake falls short of SpaceX's expected valuation of 1%, it has already directly linked the two companies financially. In terms of business, the scale and depth of transactions between the two companies are even more astonishing. SpaceX revealed in its prospectus that the company purchased $697 million worth of Tesla, Inc. Megapack energy storage systems in 2024 and 2025, used to power the Colossus supercomputing facility in Memphis for xAI. Additionally, SpaceX also purchased $131 million worth of Tesla, Inc. Cybertrucks in 2025 at the manufacturer's suggested retail price. Past collaborations between the two companies have included Tesla, Inc. selling CECEP Solar Energy equipment and automotive components to SpaceX, Tesla, Inc. using SpaceX's private aircraft, and SpaceX developing special alloy materials for Tesla, Inc.'s Cybertruck. According to statistics, the term "Tesla, Inc." appears as many as 87 times in SpaceX's prospectus, while Musk himself is only mentioned 174 times. At the supply chain level, some suppliers already view both companies as a single entity. A significant event occurred in 2024 when Musk personally requested NVIDIA Corporation to redirect a $500 million GPU order - originally meant for Tesla, Inc. - to xAI. Analysts predict: 2027 could be a crucial checkpoint Shortly after SpaceX's prospectus was released, well-known Wall Street analysts quickly provided a prediction timeline. Dan Eves, a technology analyst at Wade Bush, a US investment bank, released a research report stating: "We still believe that SpaceX and Tesla, Inc. will eventually merge into one company in 2027, with the operational integration foundation of both parties already laid out." Eves further analyzed that Musk's strategic goal is to "have and control more AI ecosystems, and combining SpaceX with Tesla, Inc. in some way will be the key link connecting these two disruptive tech giants, jointly leading the AI revolution." Driving this assessment is not just logical deduction at the strategic level but also concrete business collaborations to support it. In March 2026, Musk announced that SpaceX, xAI, and Tesla, Inc. would jointly build a large chip manufacturing facility called "Terafab" aimed at manufacturing AI chips for Tesla, Inc.'s autonomous taxis and Siasun Robot & Automation humanoid robots. Eves believes that the announcement of this joint project may be the first step towards a possible merger between Tesla, Inc. and SpaceX. Ross Gerber, CEO of investment firm Gerber Kawasaki, believes that if SpaceX and Tesla, Inc. merge, it will help Musk achieve his longstanding goal of operating a super company and make it easier to raise and allocate the massive funds needed to compete with tech giants like Alphabet Inc. Class C in the AI field. Tej Paul Batra, CEO of Nebex and long-time investor in SpaceX, believes: "I think Elon has already proven this to himself - parallel entrepreneurship seems to work for him." For investors supporting the merger, integrating SpaceX and Tesla, Inc. in the same corporate structure is expected to significantly improve resource allocation efficiency and accelerate the implementation of AI strategies. Through unified capital, technology, and data systems, this combination may be able to create the most valuable tech giant in history. Some market analysts even jokingly refer to this potential merger as the birth of "Elon Inc." According to the latest data from the predictive market platform Kalshi, the probability of SpaceX merging with Tesla, Inc. before March 1, 2027, is 37%. Legal challenges and governance structures Despite the seemingly clear operational synergy and strategic logic, a merger of this scale faces significant challenges at the technical and legal levels. Legal experts believe that a merger between SpaceX and Tesla, Inc. may not raise significant antitrust issues, as the two companies have almost no direct competition in their primary businesses. The real challenge lies in coordinating shareholder interests. Legal experts point out that the following issues will be thorny challenges: which company will become the surviving entity (parent company), the ratio at which stocks will be exchanged, and who will determine the fair valuation for both parties. Sources reveal that determining SpaceX's valuation is a primary challenge - with its valuation still fluctuating significantly before the IPO, determining a stock exchange ratio that satisfies both sets of shareholders will directly affect the success of the transaction. However, Musk is expected to face relatively limited board resistance on the SpaceX side. According to the prospectus, SpaceX uses a dual-class stock structure, with Musk holding about 85% of the company's voting rights. The prospectus also clearly states in the risk factors section that SpaceX is considered a "controlled company," meaning that its Class A shareholders "will not have the same protections as mandated by Nasdaq corporate governance requirements." On the Tesla, Inc. side, shareholders approved a compensation scheme at the end of 2024 consisting of 12 tranches, with each tranche unlocking tied to market cap milestones. If the merger goes through, coordinating this compensation scheme with the compensation incentives set for Musk at SpaceX (reaching a $7.5 trillion market cap and establishing a colony of at least one million residents on Mars) presents a similarly complex proposition. It should be noted that representatives from SpaceX and Tesla, Inc. have not yet responded to the merger rumors. Future outlook: AI-driven super integration Looking beyond the technical details of the merger transaction, what is more worth noting is the direction of technological industry transformation reflected in the rumors behind it. On the surface, a company that launches rockets based on government contracts and an electric vehicle manufacturer may seem to have little in common. However, both companies are increasingly focused on AI and the talent and computational resources necessary to build AI infrastructure and services. As mentioned above, over three-quarters of SpaceX's $10.1 billion capital expenditure in the first quarter of this year is AI-related, while Tesla, Inc. stated in its latest financial report that its capital expenditure this year will roughly double, exceeding $25 billion, to support new factory construction and AI-related infrastructure. By intertwining the narratives of space and AI, SpaceX's valuation of up to $2 trillion becomes a significant key factor. The company may find it difficult to convince investors solely through commercial launches and satellite broadband. However, if the AI narrative and the story of "space computing" are added, SpaceX's entire valuation system could undergo fundamental changes. From this perspective, the potential merger between Tesla, Inc. and SpaceX is not just about expanding corporate scale but about Musk's strategic move to build a super ecosystem spanning ground electric mobility, space transportation, satellite communication, and AI computing infrastructure. As Eves said: "Musk hopes to have and control more AI ecosystems, and combining SpaceX with Tesla, Inc. in some way will be the key link connecting these two disruptive tech giants."