Elon Musk Just Merged SpaceX and xAI — Here’s What That Means Your support helps us to tell the story Read more (AFP via Getty Images) “It is highly likely that Tesla and the SpaceX group will find themselves combined in due course once the latter has listed, consolidating Elon as not just one of the wealthiest men in the world but also one at the forefront of technological progress.” Russ Mould, investment director at AJ Bell, suggested a Tesla-SpaceX combination could even mean the latter might not need to go public. “Speculation about a further combination with Tesla to build an effective MuskCorp, which could remove the need for a SpaceX IPO, has been bubbling away even if it looks like plans for the latter’s launch on the stock market are well advanced,” he said. SpaceX: The giant IPO question It is almost certain that SpaceX will in fact float and, if it does so, it could well be the biggest in history, outstripping Saudi Aramco’s near-$30bn raise from 2019. Some reports have estimated SpaceX could generate closer to $50bn. Whatever the value, it adds kudos and further renown to one of the most famous names in industry, particularly given the future-looking aspect of SpaceX with its visions of data centres in space and people on other planets. It also makes future sense from a business perspective, says Emma Wall, chief investment strategist at Hargreaves Lansdown– but a longer-term requirement than is usual will be placed on those wanting to buy shares. “Musk announced during Tesla recent results that he would be pivoting the business away from electric vehicles to automation and artificial intelligence, and this will be true of his space travel ambitions too, meaning there are technological synergies to be made across all his businesses,” she said. “What will be key is the market’s view of the valuation. While Musk has a proven track record of delivery, he is a divisive figure and will be asking the market to value a company based on a multi-decade vision, where most CEOs operate a three to five year business cycle.” However, investing in companies is not intended to be entirely speculative and even some of Musk’s more earth-bound companies, like EV manufacturer Tesla, has critics when it comes to future income versus current ideas. Much of the revenue generated by SpaceX right now comes from the Starlink satellite network, a big draw for potential investors to get hold of. However, how much they are willing to pay to now also have to take on board other aspects of the bigger company is up for question. Criticism and concerns An initial question for investors, for example, might be that they want to buy into rocket launches and humungous piles of data, but how much do they want to buy into an AI model which has come under intense criticism lately for reportedly creating millions of sexualised images, including when told consent was withheld, and is being investigated by UK regulators? What about investing in the social media platform hosting those images, which itself is being investigated by Paris officials over deepfakes and worse? In an all-under-one-umbrella setup, there is no choice to split that preference. open image in gallery