EV company Tesla’s shares jumped by more than 4% after media updates suggesting that two of Elon Musk’s companies—xAI and SpaceX—are potentially due for a merger with talks in progress, as per a Reuters report.
The update comes after Tesla posted lacklustre Q4 earnings with a revenue slowdown of 3%, owing to tough competition from China and decreased sale volume from a general slump in purchases after tax incentives were scrapped under the current U.S. administration.
If brought to fruition, the merger would mean the integration of two multi-billion-dollar privately held startups under Musk’s purview, companies that have given him a significant portion of his net worth of $788 billion, according to Forbes.
SpaceX is also potentially in line for an IPO this year, with a possible value of $1 trillion.
Media reports have suggested other merger possibilities. Bloomberg said that a merger between Tesla and SpaceX was also in talks, referencing anonymous insiders as their source.
The three companies have technologies that, in some cases, feed into each other’s products and services already, or make collaboration possible for certain projects.
Last year, new Tesla cars were made with LLM Chatbot Grok integrated in them, one of the main generative AI models managed under xAI. At the World Economic Forum in Davos, Musk said that SpaceX and Tesla were working together to create 100 GW of solar energy in the U.S.
Musk spoke about possible projects on which at least two technologies from AI, space tech, robotics, and automated driving tech would have to be used, such as the creation of AI-powered satellites.
At the time of writing, Tesla shares were trading at $434.08, up by 4.20%