Elon Musk’s SpaceX Reportedly Considering Merger With xAI Ahead Of Planned IPO

• Some xAI executives could also be given the option to receive cash instead of SpaceX stock, the report said. 
• The news comes on the heels of reports that SpaceX is contemplating an IPO as early as this year with a valuation over $1 trillion.

Elon Musk’s rocket manufacturing company SpaceX is reportedly in talks with the billionaire’s AI startup xAI about a potential merger ahead of a blockbuster public offering.

Under the proposed merger, shares of xAI would be exchanged for shares in SpaceX, Reuters reported on Thursday, citing people familiar with the matter and company filings. Some xAI executives could also be given the option to receive cash instead of SpaceX stock, it noted.

xAI controls the social media platform X and is also known for its controversial Grok chatbot.

Entities For Merger

As per the report from Reuters, two entities have been set up in Nevada to facilitate the merger, the value and timing of which remains under wraps. The entities were set up on Jan 21 and one of them is a limited company that lists SpaceX and its CFO Bret Johnsen as manager members.

The second entity, meanwhile, lists Johnsen as the company’s only officer, the report said, citing company filings. The filings, however, do not elaborate on their role in a potential deal, the report said.  

According to a Reuters source, the final agreement has not been signed and details pertaining to timing and structure of the deal could change.

SpaceX was most recently valued at $800 billion in an insider share sale. xAI, meanwhile, was valued at $230 billion in November, the report noted.

The news comes on the heels of reports that SpaceX is contemplating an IPO as early as this year with a valuation over $1 trillion. Earlier this week, Musk’s EV company Tesla also announced an investment of $2 billion in xAI.

On Stocktwits, retail sentiment around SPACEX was within the ‘bearish’ territory while sentiment around xAI trended in the ‘neutral’ territory at the time of writing.

Shares of telecommunication company EchoStar Corp (SATS) fell 10% following the news. 

Read More: KRRO Shares Jump 13% On Analyst Upgrades — What’s Driving The Optimism?

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