{"id":5332,"date":"2026-02-10T09:59:05","date_gmt":"2026-02-10T09:59:05","guid":{"rendered":"https:\/\/marketsfortress.com\/index.php\/2026\/02\/10\/markets-will-soon-test-a-musk-merger-that-promises-space-based-internet\/"},"modified":"2026-02-10T09:59:05","modified_gmt":"2026-02-10T09:59:05","slug":"markets-will-soon-test-a-musk-merger-that-promises-space-based-internet","status":"publish","type":"post","link":"https:\/\/marketsfortress.com\/index.php\/2026\/02\/10\/markets-will-soon-test-a-musk-merger-that-promises-space-based-internet\/","title":{"rendered":"Markets will soon test a Musk merger that promises ‘space-based internet’"},"content":{"rendered":"

Elon Musk\u2019s move last week to combine SpaceX and xAI<\/a> has created one of the world\u2019s biggest and most valuable private companies, which analysts say offers a mix of potential growth and financial risk as it heads toward public markets.<\/p>\n

The two companies are very different. SpaceX was founded in 2002 and has established itself as the premier nongovernmental space exploration operation. Musk\u2019s xAI venture was started less than three years ago to focus on AI and more recently social media. In another Musk company combo, xAI acquired the social media platform X last March<\/a>.<\/p>\n

<\/div>\n

Analysts told NBC News that both entities have something to gain from coming together: SpaceX gets an edge ahead of its IPO, and xAI can expand its AI infrastructure while getting a much needed \u201cinjection of cash,\u201d as one expert put it.<\/p>\n

In his Monday announcement<\/a>, Musk said the merger will create a company with \u201cAI, rockets, space-based internet, direct-to-mobile device communications and the world\u2019s foremost real-time information and free speech platform.\u201d<\/p>\n

Musk added that he wants to create AI data centers in space by \u201claunching a constellation of a million satellites that operate as orbital data centers.\u201d<\/p>\n

And Musk is pushing forward on this concept.<\/p>\n

Days prior to the merger announcement, SpaceX described the satellite plan to regulators, according to a filing submitted to the Federal Communications Commission and reviewed by NBC News.<\/p>\n

\u201cThere\u2019s industrial logic behind combining SpaceX, which would launch and design the satellites that would host the compute with xAI, which has experience operating these compute clusters and has the Grok model that would presumably run on it,\u201d said Nick Del Deo, a senior research analyst with a focus on digital infrastructure at MoffettNathanson.<\/p>\n

The concept of data centers in space is \u201cconceivable,\u201d Del Deo said in a phone interview, but he predicted it would take \u201cmany years before anything substantive happens.\u201d<\/p>\n

\u201cA lot of things need to go right for it to work, let alone for it to work at a scale that is relevant compared to terrestrial alternatives,\u201d he said.<\/p>\n

Not surprisingly, Musk envisions a shorter timeline. In the announcement, he estimated that in just two to three years, the \u201clowest cost way to generate AI compute will be in space.\u201d (Musk has been known to set \u2014 and miss \u2014 ambitions timelines<\/a>.)<\/p>\n

Andrew Rocco, a stock strategist at Zacks Investment Research, told NBC News that he thinks the acquisition makes sense.<\/p>\n

\u201cThere\u2019s going to be a ton of synergies that it\u2019s going to be a lot smoother for both of these companies,\u201d he said in a phone interview.<\/p>\n

\u201cSpaceX, with its massive payload capacity and basically a near monopoly in space \u2014 I think it\u2019s going to help Musk\u2019s other companies kind of catch up in the AI data center race and AI training race,\u201d said Rocco.<\/p>\n

Beyond the futuristic visions of space-based data centers, there are near-term financial considerations at play, too.<\/p>\n

As SpaceX prepares to go public later this year, the merger could be Musk\u2019s way of positioning SpaceX \u201cstrategically\u201d to compete with the expected IPOs of two of his biggest competitors, OpenAI and Anthropic, in the AI race, said Ali Javaheri, a senior research analyst at PitchBook.<\/p>\n

Del Deo said one \u201ccynical view\u201d of the merger is that SpaceX needs a \u201csexy narrative\u201d ahead of its IPO \u201cto get investors more excited in the stock and drive the sort of valuation that they\u2019re hoping for.\u201d<\/p>\n

Bloomberg reported<\/a> that the merger would value the combined companies at $1.25 trillion, with the bulk of the valuation \u2014 $1 trillion \u2014 coming from SpaceX. However, xAI\u2019s value still pumps up SpaceX\u2019s total valuation ahead of it going public.<\/p>\n

A Tuesday note co-authored by Dan Ives, global head of technology research at Wedbush Securities, said this would mark the \u201clargest tie-up across Musk\u2019s enterprises yet.\u201d<\/p>\n

Forrester analysts wrote in a Tuesday report that \u201caligning\u201d the merger as well as the FCC filing ahead of its potential IPO is a \u201cclassic Musk valuation inflation.\u201d<\/p>\n

\u201cSpaceX is packaging a narrative of hyperscalable, lowest\u2011cost AI compute from space \u2014 the kind of storyline that expands TAM, lifts growth multiples, and reframes Starship as a structural cost moat,\u201d the analysts wrote. \u201cThese are classic ingredients for pre\u2011IPO narrative lift \u2014 and a familiar pattern in Musk\u2011era market signaling. It positions ambition as inevitability, inviting investors to price in a future that engineering has yet to substantiate.\u201d<\/p>\n

Rocco, on the other hand, said he thinks it will likely be \u201cone of the most hyped IPOs in history.\u201d<\/p>\n

\u201cI can\u2019t think of another one that would be more hyped than this \u2014 everyone is trying to get a piece of SpaceX,\u201d he said. \u201cI think it\u2019s going to price higher than most people expect, and most people already expect it to be the largest IPO in history.\u201d<\/p>\n

SpaceX and xAI joining forces has driven speculation over what this means for Musk\u2019s electric vehicle company Tesla.<\/p>\n

Tesla announced in its latest earnings release<\/a> that it\u2019s investing about $2 billion to acquire shares of xAI\u2019s preferred stock. The two companies entered into a \u201cframework agreement\u201d to evaluate \u201cpotential AI collaborations,\u201d Tesla added.<\/p>\n

Wedbush said there is a \u201cgrowing chance that Tesla will eventually be merged in some form into SpaceX\/xAI over time.\u201d<\/p>\n

\u201cMusk wants to own and control more of the AI ecosystem and step by step the holy grail could be combining SpaceX and Tesla over the next 12 to 18 months in some form to give the connected tissue between both disruptive tech stalwarts looking to lead the AI Revolution,\u201d Wedbush continued.<\/p>\n

Javaheri echoed this sentiment, saying he thinks this move will eventually lead to \u201cTesla also getting folded.\u201d<\/p>\n

In the long run, Rocco said he thinks it would be a \u201cgood synergy,\u201d but that it would be a \u201cvery hard sell.\u201d He said if he were a private investor in SpaceX, he would \u201cjust want it to come public on its own \u2014 they basically have a monopoly.\u201d<\/p>\n

Gene Munster, managing partner, co-founder and head of portfolio research at Deepwater Asset Management, said in an interview that he thinks Tesla shareholders would \u201cwelcome a combination.\u201d<\/p>\n

\u201cBringing these two visions closer together, specifically around robotics and space and having AI sit in the middle of it, it\u2019s not only a good story, but there\u2019s real substance to it,\u201d Munster said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Elon Musk\u2019s move last week to combine SpaceX and xAI has created one of the world\u2019s biggest and most valuable private companies, which analysts say offers a mix of potential growth and financial risk as it heads toward public markets. The two companies are very different. SpaceX was founded in 2002 and has established itself <\/p>\n","protected":false},"author":0,"featured_media":5333,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-5332","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts\/5332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/comments?post=5332"}],"version-history":[{"count":0,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/posts\/5332\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/media\/5333"}],"wp:attachment":[{"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/media?parent=5332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/categories?post=5332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marketsfortress.com\/index.php\/wp-json\/wp\/v2\/tags?post=5332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}