Elon Musk’s two companies merge because Wall Street loves simplicity

SpaceX is no longer SpaceX and xAI is no longer xAI. Instead, the company has decided to merge both names, and from now on it will be called SpaceXAI. That new name makes one thing very clear: the company is selling itself to Wall Street as an AI company that also launches rockets, not the other way around.

A fusion that was sung. SpaceX bought xAI —and with it, both the Grok AI model and the social network X— in early February. He did so in a 100% stock move that valued SpaceX at $1 trillion and xAI at $250 billion. The name change is above all a marketing “punchline” about that de facto merger. The strategy has as one of its probable arguments a simplification that will undoubtedly be liked on Wall Street: Musk has created many companies that seemed to operate independently, so consolidating them gives that vision of a unified purpose and objective.

This is not just about image. After the merger that occurred in February there was a clear reason: the dream of orbital data centers. Musk has been talking for some time about how ground infrastructure can’t meet AI’s global electrical demand, and SpaceX has already asked the FCC for permission to deploy up to a million satellites that work like computing nodes in low orbit. Therefore, having SpaceX and xAI completely merged also by their name simplifies this entire ecosystem.

Going public helps. The decision comes shortly after SpaceX debuted on the stock market in June with the largest IPO in history. It raised $75 billion and earned a valuation of $1.77 trillion.

The milkmaid’s tale? Before going public, SpaceX spoke of the “Total Addressable Market” (TAM), an estimate of the total size of the business they could access if they captured 100% of the demand and the figure is colossal: 28.5 billion dollarsof which 26.5 billion would correspond to AI, 1.6 billion in connectivity (Starlink) and only 370,000 to the space segment.

Part of the animation of the “fusion” between both names showed this aspect.

Grok and Cursor as pieces of the future. Grok continues and will continue to operate under the SpaceXAI umbrella, and of course the infrastructure agreements already signed are also maintained. The most important, the one that Anthropic recently signed and for which will pay 1,250 million dollars monthly to SpaceXAI for access to computing in the Colossus data centers. Google will pay 920 million monthly for the same. The other piece of the future is Cursor, the AI ​​agent for programming which is key so that the company can infiltrate companies.

And Tesla, what? Since the merger with SpaceX was closed, there has been speculation on Wall Street with a plausible future: that Tesla will be the next to disappear as an independent company. SpaceX’s own president, Gwynne Shotwell, recognized the day of the IPO that there is a clear “convergence” between both companies, although he avoided talking about dates. Both are already collaborating on projects such as the ambitious Terafab, and Tesla maintains an investment of $2 billion in SpaceX which, after the merger with xAI, has already generated a capital gain on paper of around 64% due to the rise in the value of SpaceX shares.

A very strong option. This “merger” with Tesla seems certainly likely. Wedbush consulting analyst Dan Ives esteem that there is an 80% probability that the movement will occur, and the Kalshi betting platform handles in these moments a 51% chance of that move arriving before May 2027. Some of the groundwork is already done in practice: both companies share engineers and both face bottlenecks in the form of power supply and cooling for their AI systems.

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