Speculation that Elon Musk may merge SpaceX and xAI ahead of a potential IPO is reviving hopes—and concerns—about AI convergence across his companies, including Tesla.

SpaceX announced today that it has acquired xAI, Elon Musk’s AI company, in a deal that creates a combined entity reportedly valued at $1.25 trillion ahead of a planned IPO. The acquisition notably does not include Tesla,

SpaceX is considering a potential merger with Tesla Inc., as well as an alternative combination with artificial intelligence firm xAI, according to people familiar with the matter, a sign billionaire Elon Musk is weighing how to consolidate his empire.

In Tesla's annual financial filing, the company said that last year it sold $430 million worth of its energy storage products to xAI, Elon Musk's AI startup.

Tesla earnings beat Wall Street's estimates. The stock rose in after hours trading. A call with analysts is scheduled for 5:30 p.m. ET.

B xAI deal done, Model S/X axed, energy soars to $3.84B record, capex doubles to $20B+ as first revenue drop hits.

Tesla has pledged a $2 billion investment in Elon Musk’s AI startup, xAI, emphasizing its push towards autonomy and robotics. Investors are keenly watching Tesla’s self-driving and robotaxi developments,