Tesla Now Owns a Piece of SpaceX After xAI Merger

Tesla converts $2 billion xAI investment into a minority stake in SpaceX

Tesla has cleared a key regulatory step to tighten financial links within Elon Musk’s group of companies. According to new filings with the U.S. Federal Trade Commission (FTC), the automaker received approval to convert its prior $2 billion investment in xAI into a minority equity stake in SpaceX.

This action follows a broad restructuring of Musk’s private ventures. According to Bloomberg, the conversion formalizes the connection between Tesla and the rocket company as SpaceX prepares for what could be the largest initial public offering (IPO) in history.

The SpaceX and xAI merger

The equity shift stems from SpaceX’s official acquisition of xAI last month. By folding the artificial intelligence startup into the space-launch company, Musk created a combined entity valued at $1.25 trillion.

The strategy is to leverage SpaceX’s Starlink network and launch capabilities to ultimately put AI data centers in space, powering xAI’s massive computing needs. Musk wants to deploy millions of solar-powered AI satellites capable of processing information far above Earth’s atmosphere. Since Tesla’s initial $2 billion investment was directed to xAI before the merger, that capital is now being rolled over into a SpaceX stake that analysts estimate to be less than 1% of the rocket company.

A converging path for the Musk empire

The development signals that Tesla is evolving into a central node in a multi-industry network. Just days ago, Musk announced Digital Optimus ("Macrohard"), a joint venture between Tesla and xAI aimed at automating office work.

Speculation is growing that this consolidation is only the beginning. With xAI now under the SpaceX umbrella and Tesla holding a direct stake in the parent company, the boundaries between the "car company," the "space company," and the "AI company" are blurring. Rumors surfaced earlier this year that SpaceX had explored a full merger with Tesla, and while that hasn’t happened yet, the financial and technical overlap suggests that Musk is building a singular, vertically integrated technology giant.

What this means for shareholders

For Tesla investors, the conversion offers rare indirect exposure to SpaceX ahead of a public listing. If the SpaceX IPO proceeds at its rumored $1.5 trillion valuation later this year, Tesla’s small stake could see a significant increase in value.

While some investors worry about the complexity of these intertwined deals, the FTC’s green light suggests regulators are satisfied for now. As Musk continues to reorder his empire ahead of the big IPO, the "Musk Galaxy" is looking more like a single, unified organism than a collection of separate businesses.