Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
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Economy
/ February 4, 2026
Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
The tech mogul and would-be space pioneer is mashing up his properties once more in a deal that’s unlikely to achieve escape velocity .
Jacob Silverman
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Elon Musk peddles his vision of cosmic colonization at the World Economic Forum in Davos, Switzerland.
(Fabrice Coffrini / AFP via Getty Images)
After what were surely some very intense negotiations with himself, Elon Musk has decided to merge his rocket company SpaceX with his AI and social-media company xAI in what amounts to a $1.25 trillion tie-up. Combining two of his companies into a new mega-corp supposedly worth more than the sum of its overvalued parts is a classic Musk move. His last self-merging coup came last year when he combined X and xAI. Along with frequent capital raises, Musk’s vertically integrated takeovers of his own properties allow him to continue to pump up the values of his start-ups. In December, SpaceX was valued at $800 billion. Less than two months later, for the purposes of this deal, it was valued at $1 trillion, with xAI considered to be worth $250 billion.
SpaceX sealed the deal by issuing $250 billion in new shares that it handed to xAI’s shareholders. The move effectively diluted the holdings of existing SpaceX shareholders. The New York Times summed up the parlous bargain: “SpaceX’s longtime backers were forced to shrink their ownership in the company drastically, as a percentage, to pay for the acquisition.”
That would infuriate most investors, but thanks to the circular nature of Musk’s corporate economy—otherwise known as the Muskonomy—and his frequent reliance on the same group of financiers, some of SpaceX’s investors were already xAI investors. (SpaceX is also expected to raise at least $50 billion in a public offering this summer.) Minting new SpaceX shares is supposed to buoy the entire enterprise while saving Musk the trouble of pursuing more conventional ownership models that involve real dollars.
Current Issue
February 2026 Issue
Tesla is Musk’s only publicly traded company, but all of his firms do business with one another, share personnel and investors, and are otherwise increasingly intertwined. Just a few months ago, Musk was putting forward initiatives to have Tesla and SpaceX invest billions in xAI. Some have suggested that his many ventures will one day be amalgamated under a single Musk Corp, which Musk can oversee with the imperiousness, resource shuffling, and ad hoc financial engineering that can be generously termed his management style.
Musk’s periodic mergers and …
Every delay has consequences.
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Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
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Current Issue
Economy
/ February 4, 2026
Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
The tech mogul and would-be space pioneer is mashing up his properties once more in a deal that’s unlikely to achieve escape velocity .
Jacob Silverman
Share
Copy Link
X (Twitter)
Bluesky Pocket
Ad Policy
Elon Musk peddles his vision of cosmic colonization at the World Economic Forum in Davos, Switzerland.
(Fabrice Coffrini / AFP via Getty Images)
After what were surely some very intense negotiations with himself, Elon Musk has decided to merge his rocket company SpaceX with his AI and social-media company xAI in what amounts to a $1.25 trillion tie-up. Combining two of his companies into a new mega-corp supposedly worth more than the sum of its overvalued parts is a classic Musk move. His last self-merging coup came last year when he combined X and xAI. Along with frequent capital raises, Musk’s vertically integrated takeovers of his own properties allow him to continue to pump up the values of his start-ups. In December, SpaceX was valued at $800 billion. Less than two months later, for the purposes of this deal, it was valued at $1 trillion, with xAI considered to be worth $250 billion.
SpaceX sealed the deal by issuing $250 billion in new shares that it handed to xAI’s shareholders. The move effectively diluted the holdings of existing SpaceX shareholders. The New York Times summed up the parlous bargain: “SpaceX’s longtime backers were forced to shrink their ownership in the company drastically, as a percentage, to pay for the acquisition.”
That would infuriate most investors, but thanks to the circular nature of Musk’s corporate economy—otherwise known as the Muskonomy—and his frequent reliance on the same group of financiers, some of SpaceX’s investors were already xAI investors. (SpaceX is also expected to raise at least $50 billion in a public offering this summer.) Minting new SpaceX shares is supposed to buoy the entire enterprise while saving Musk the trouble of pursuing more conventional ownership models that involve real dollars.
Current Issue
February 2026 Issue
Tesla is Musk’s only publicly traded company, but all of his firms do business with one another, share personnel and investors, and are otherwise increasingly intertwined. Just a few months ago, Musk was putting forward initiatives to have Tesla and SpaceX invest billions in xAI. Some have suggested that his many ventures will one day be amalgamated under a single Musk Corp, which Musk can oversee with the imperiousness, resource shuffling, and ad hoc financial engineering that can be generously termed his management style.
Musk’s periodic mergers and …
Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
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Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
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Current Issue
Economy
/ February 4, 2026
Why Elon Musk’s Latest Mega Merger Is Little More than Vaporware
The tech mogul and would-be space pioneer is mashing up his properties once more in a deal that’s unlikely to achieve escape velocity .
Jacob Silverman
Share
Copy Link
Facebook
X (Twitter)
Bluesky Pocket
Email
Ad Policy
Elon Musk peddles his vision of cosmic colonization at the World Economic Forum in Davos, Switzerland.
(Fabrice Coffrini / AFP via Getty Images)
After what were surely some very intense negotiations with himself, Elon Musk has decided to merge his rocket company SpaceX with his AI and social-media company xAI in what amounts to a $1.25 trillion tie-up. Combining two of his companies into a new mega-corp supposedly worth more than the sum of its overvalued parts is a classic Musk move. His last self-merging coup came last year when he combined X and xAI. Along with frequent capital raises, Musk’s vertically integrated takeovers of his own properties allow him to continue to pump up the values of his start-ups. In December, SpaceX was valued at $800 billion. Less than two months later, for the purposes of this deal, it was valued at $1 trillion, with xAI considered to be worth $250 billion.
SpaceX sealed the deal by issuing $250 billion in new shares that it handed to xAI’s shareholders. The move effectively diluted the holdings of existing SpaceX shareholders. The New York Times summed up the parlous bargain: “SpaceX’s longtime backers were forced to shrink their ownership in the company drastically, as a percentage, to pay for the acquisition.”
That would infuriate most investors, but thanks to the circular nature of Musk’s corporate economy—otherwise known as the Muskonomy—and his frequent reliance on the same group of financiers, some of SpaceX’s investors were already xAI investors. (SpaceX is also expected to raise at least $50 billion in a public offering this summer.) Minting new SpaceX shares is supposed to buoy the entire enterprise while saving Musk the trouble of pursuing more conventional ownership models that involve real dollars.
Current Issue
February 2026 Issue
Tesla is Musk’s only publicly traded company, but all of his firms do business with one another, share personnel and investors, and are otherwise increasingly intertwined. Just a few months ago, Musk was putting forward initiatives to have Tesla and SpaceX invest billions in xAI. Some have suggested that his many ventures will one day be amalgamated under a single Musk Corp, which Musk can oversee with the imperiousness, resource shuffling, and ad hoc financial engineering that can be generously termed his management style.
Musk’s periodic mergers and …
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