Elon Musk is consolidating his portfolio of companies, known as the “Muskonomy”, with a plan to combine his rocket company, SpaceX and artificial intelligence firm xAI. That values the new combined entity at $1.25 trillion. For the first time, SpaceX is on track to make as much money as Tesla, Musk’s crown jewel in the business world.
Although Tesla is a public company valued at roughly $1.58 trillion, its valuation has dipped in recent times in light of lower car deliveries and heightened competition from China. SpaceX, in turn, has a stranglehold on the rocket market with gigantic government contracts as well as its Starlink satellite internet service. With Musk’s stake in SpaceX far larger than his Tesla share, the rocket company now accounts for more than half his total net worth.
Space Data Centres and Colossal Technical Barriers
Musk has one extravagant plan for giant data centres in space. He thinks Earth is exhausting the vast amount of energy it takes to fuel advanced AI. By placing such computers in orbit, SpaceX aims to evade those limits. To do this, the company has requested authorisation to put up as many as a million satellites.
But experts are uncertain about how quickly that can happen. Constructing functioning data centres in space is very difficult because computers generate so much heat, and there’s no air in the vacuum of space to help cool equipment. Radiation is another big issue that could very well fry sensitive electronics. Analysts say the expense of building and operating a network of that scale would be “simply enormous,” so this pipe dream is likely years away.
Tesla Moves Toward Robots
While SpaceX expands, Tesla is facing an identity crisis of its own. The company has recently halted production of an older generation of Model S and Model X cars while it focuses on new products. Musk is wagering the future of the car company on “Robotaxis” and a humanoid robot called Optimus. He would convert the old car assembly lines to factories, producing these robots.
This shift is coming at an inopportune moment. Total revenue at Tesla declined in 2025 for the first time, and the company faces political challenges both in the United States and Europe. Investors are eager to see whether Tesla can achieve a valuation of $2 trillion, the target that Musk must meet to earn his next colossal payday.
Legal Risks and Global Pressure
Just as important, the takeover would also pull xAI’s legal travails into SpaceX’s universe. A team of police forces in the US and France are investigating “Grok” AI images for potentially enabling the creation of dangerous abusive images. Earlier this week, French government investigators raided the offices of X, the social media platform also owned by Musk, as part of an investigation into how the site uses its computer programs.
These legal fights may cause headaches for SpaceX. While the rocket side of the company does mostly work with the United States government, the Starlink high-speed internet service is in use all across the planet. If regulators decide that Musk’s AI or social media ventures are breaking the law, it could impact SpaceX getting licenses to operate in those countries. For now, Musk is still on top, but the risks extend to his entire empire.
Key Highlights
- SpaceX, which recently merged with the artificial intelligence company xAI, has a new valuation: $1.25 trillion.
- Elon Musk wants to build AI data centres in space to address energy shortages on Earth.
- Tesla is discontinuing old car models to make humanoid robots.
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