Three companies led by Elon Musk—SpaceX, xAI, and Tesla—are reportedly in discussions about a potential merger. Although these talks are said to be in preliminary stages, they could ultimately result in at least one of the businesses being absorbed into SpaceX.

Two possible scenarios are currently under consideration. According to unnamed sources, one option involves a merger between SpaceX and Tesla. The other possibility would combine SpaceX with xAI, which already owns the social media platform X.

Reports suggest that a merger of SpaceX and xAI might occur ahead of a planned SpaceX initial public offering later this year. Such a move would unite products like the Grok chatbot, the X platform, Starlink satellites, and SpaceX rockets under a single corporate umbrella.

Representatives from SpaceX and xAI have not publicly commented on these merger possibilities. However, recent corporate filings reveal that two new entities named K2 Merger Sub Inc. and K2 Merger Sub 2 LLC were formed in Nevada on January 21, indicating that Musk is exploring multiple avenues.

Each potential combination offers distinct advantages. Merging SpaceX with xAI could enable xAI to position its data centers in space, an ambition Musk has previously expressed. A SpaceX-Tesla merger, meanwhile, could align Tesla’s energy storage operations with the concept of space-based data infrastructure.

Both options—along with a potential three-way merger—reflect Musk’s stated interest in consolidating resources across his companies. Last year, SpaceX committed to investing $2 billion in xAI, and Tesla recently disclosed a similar $2 billion investment in the AI startup.

In a separate transaction last year, xAI acquired X in a deal that valued xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, recently conducted a secondary sale that reportedly valued the company at $800 billion, making it the most valuable privately held company in the United States.

Recent reports have indicated that Musk aims to take SpaceX public as early as June, though his ambitious timelines have often experienced delays.