'Elon Thinking Big,' Says Gene Munster As SpaceX Explores xAI-Tesla Tie-Up Ahead Of $1.5 Trillion IPO

Elon Musk has once again fueled merger speculation after reports said SpaceX is exploring a potential tie-up involving xAI and Tesla Inc. (NASDAQ:TSLA) as it prepares for what could be one of the largest IPOs in history.

SpaceX, xAI And Tesla: Merger Talk Gains Momentum

SpaceX has reportedly been holding internal discussions around a possible merger involving Tesla and xAI.

The space exploration company is reportedly targeting an IPO as early as June at a valuation of around $1.5 trillion, a move that would instantly make it one of the most valuable publicly traded firms in the world.

Gene Munster Breaks Down The Odds

On Thursday, Deepwater Asset Management's managing partner Gene Munster weighed in on X, calling the situation a classic example of "Elon thinking big."

Munster outlined his view of how the scenario could play out over the next three years, assigning a 45% chance that Tesla acquires xAI, a 35% chance SpaceX buys xAI and a 20% probability that xAI remains independent.

"My take: Investors would likely approve the deal (either SpaceX or Tesla buying xAI) because it’s Elon thinking big, future versions of Colossus belong in space," Munster wrote.

Both SpaceX and Tesla have already invested $2 billion each into xAI.

Why AI Is Central To Musk's Strategy

In a separate post, Munster said Musk's companies "will always play nice with each other," outlining how each could benefit from xAI.

SpaceX, he said, wants xAI to power datacenters "in the sky," while Tesla would leverage Grok, xAI's chatbot, for Full Self-Driving software and the Optimus humanoid robot program.

"If SpaceX buys xAI, Tesla will still get access to Grok," Munster added.

Investor Chamath Palihapitiya also took to X and said that a merger between SpaceX and Tesla would instantly create a modern-day Berkshire Hathaway.

“If this were to happen, it would also bring us one step closer to having one equity instrument for all things Elon which many would want to buy,” he said.

IPO Timing And Market Bets

Prediction market Kalshi shows strong belief that SpaceX will announce an IPO before mid-2026.

Price Action: Tesla shares closed down 3.23% at $416.57 on Thursday and rebounded by 2.86% in overnight trading to $428.50, according to Benzinga Pro.

TSLA maintains a stronger price trend over the medium and long terms, with a poor value ranking. Additional performance details, as per Benzinga’s Edge Stock Rankings.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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