SpaceX Deal Redraws the Balance
Elon Musk’s business empire has taken a dramatic turn after SpaceX’s merger with artificial intelligence firm xAI pushed the combined company’s valuation to $1.25 trillion (€1.06tn). That figure brings SpaceX within striking distance of Tesla, whose market capitalisation stands at roughly $1.58 trillion (€1.34tn). On paper, Musk now appears to derive more of his personal wealth from rockets and AI than from electric cars, marking a major shift in where his influence and value lie.
The deal values SpaceX at $1 trillion, with xAI contributing a further $250 billion. It follows last year’s move in which xAI absorbed the social media platform X, formerly Twitter, as Musk continues to knit together his technology ventures around data, computing power and artificial intelligence.
Tesla Struggles as Focus Moves Elsewhere
While SpaceX is riding high, Tesla has entered 2026 under pressure. Shares are down about 6% so far this year after the company reported a 16% drop in vehicle deliveries and a 3% fall in annual revenue in 2025 — the first decline in its history. Competition from Chinese and European carmakers, combined with the loss of US electric vehicle tax credits, has squeezed the core business.
Musk has responded by accelerating Tesla’s pivot away from traditional cars. He has confirmed plans to end production of the Model S and X, which made up less than 3% of deliveries last year, and to reuse those facilities for the Optimus humanoid robot project. Robotaxis and robotics are now central to Tesla’s long-term vision, even though neither has yet generated meaningful revenue. Musk’s political activity and public alignments have also added to the pressure on Tesla’s brand.
Big Ambitions, Bigger Risks
By contrast, SpaceX dominates its sector. It leads the global launch market, holds major contracts with NASA and the US Department of Defense, and runs the Starlink satellite network, which now serves around nine million customers with more than 9,000 satellites in orbit. Musk has said the SpaceX-xAI merger is aimed at enabling space-based data centres, an idea he believes could bypass energy constraints on Earth, though experts caution that such projects face immense technical and financial hurdles.
The merger is not without risk. SpaceX profits could be diverted to support xAI’s costly infrastructure build-out, while xAI itself is under regulatory scrutiny in several countries over misuse of its Grok image generator. Investigations and legal challenges linked to X could also spill over into the wider group. For now, those issues may be easier to contain while SpaceX remains private, but any future public listing would force investors to weigh its towering valuation against growing political and regulatory uncertainty.
