After filing a record shattering public offer on May 20, speculation has grown that SpaceX,
Elon Musk’s satellite and rocket company, will ultimately merge with Tesla, the electronic
vehicle pioneer. While many analysts express confidence that such a merger will happen by
early next year, others have handicapped the likelihood as far less certain. Kalshi traders
speculate the chances of the merger at only 33% by May of 2027, while other traders
expressed great confidence upon announcement of SpaceX’s IPO, only to see their
expectations drop to less than 40% the next day.
Though many note such a merger seems natural, as both companies have Musk as CEO
and both have been at the forefront of the AI revolution, others have cooled to the idea.
“Step by step the holy grail could be combining SpaceX and Tesla in some way to give the
connected tissue between both disruptive tech stalwarts looking to lead the AI Revolution,”
wrote Wedbush analyst Dan Ives, who expects the two companies to merge by next year.
This would help Musk’s presumed desire to own and control more of the AI ecosystem.
However, many Tesla shareholders feel the merger could devalue Tesla stock and distract
the company from its core EV business.
As for the IPO itself, the staggering 227-page report offered eye-popping insight into one of
the world’s largest, most ambitious, yet secretive, companies.
Aside from detailing previously unknown information, including its board members, sales,
profit and expenses, it outlined the company’s bold mission: “to build the systems and
technologies necessary to make life multiplanetary, to understand the true nature of the
universe, and to extend the light of consciousness to the stars.”
SpaceX will continue to rapidly manufacture and launch its fleet of satellites to power its
Starlink communications technology. And, as stated in their bold prospectus, SpaceX will
“harness the Sun to power a truth-seeking artificial intelligence that advances scientific
discovery, and ultimately to build a base on the Moon and cities on other planets.”
To do that, SpaceX will need to spend money—lots and lots of money, thus the need to
borrow from investors.
For all their lofty and visionary goals, and despite the rapid growth of SpaceX, its ambitions
outstrip its current sales. They posted $18.7 billion in revenue last year, up 33% from the
previous year. But the company does not make money. After turning a $791 million profit in
2024, SpaceX dropped a $4.9 billion loss in 2025. And this on the heels of losing $4.6
billion in 2023. The losses will likely continue in 2026, as SpaceX has already lost $4.3
billion in the first three months of 2026 on $4.7 billion in revenue.
For all the high expense of rockets, SpaceX has poured a massive amount of capital into AI
infrastructure. Last year, they sunk $12.7 billion into AI, while spending $4.2 billion on
Starlink, and $3.8 billion on other space ventures, including rockets. In the first three
months of this year, SpaceX already spent $10.1 billion, $7.7 billion on continuing AI
buildout.
But SpaceX does not plan on losing money forever. The IPO outlined an astonishing
potential revenue opportunity, claiming it could total $28.5 trillion—an opportunity SpaceX
calls “the largest actionable total addressable market in human history.”
The glassy-eyed numbers continued—in this “addressable market” are $370 billion in
“space enabled solutions”, $1.6 trillion in connectivity, which includes $870 billion in
broadband and $740 billion in mobile from its low-earth orbit Starlink satellites and $26.5
trillion in AI.
Included in the AI opportunity is their $2.4 trillion dollar plan to launch data centers into
space and $760 billion in potential consumer subscriptions. Also, SpaceX believes it has
$600 billion in advertising potential and $22 trillion in what it calls “enterprise
applications”.
The numbers, which begin to run out of superlatives, are typical of Musk’s showmanship
and grandiose intent. How convinced his investors are whether such lofty goals can be
attained remains to be seen. The blockbuster IPO could bring in massive amounts of
money, and it could make Musk the world’s first trillionaire. For now, Musk owns a
considerable chunk of SpaceX, including a 12.3% stake in common shares and 93.6% in
Class B shares, giving Musk 85.1% of the company’s voting power, thus guaranteeing he’ll
maintain control of at least a plurality of the votes after the IPO.
As for what Musk will make, the company revealed his salary has remained the same since
2019, $54,080. But SpaceX also said he will be compensated “15 tranches (a division or
portion of related securities) of 66,666,665 shares each if the company achieves various
stock market valuation milestones in $500 billion increments up to $7.5 trillion—and
establishes a permanent human colony on Mars with at least a million inhabitants. Musk
will only get those shares if the company achieves both targets—and if he remains
employed by the company.
As for Tesla, their stock rose on Wednesday 1.2% to 421.71. Ross Gerber, an early Tesla
investor, calls the merger an “inevitability” and a combined Tesla-SpaceX company would
be the “Berkshire Hathaway of AI”, because it would control so many different aspects of
the technology. Tesla shares are down about 6% this year, but up roughly 25% over the last
consecutive 12 months.
Be the first to comment