Elon Musk’s SpaceX is reportedly exploring potential mergers with either Tesla or his AI company xAI, ahead of a planned public offering this year.

A merger with xAI would consolidate Musk’s rockets, Starlink satellites, the X social media platform, and the Grok AI chatbot, while a tie-up with Tesla has been advocated by some investors to streamline his sprawling business empire.

A merger could boost SpaceX’s plans for orbital data centers, support AI development, and even integrate Tesla’s energy and robotics capabilities into space operations.

Some Tesla shareholders see consolidation as a way to reduce risks associated with Musk managing multiple companies.

Tesla shares rose 4.5% in after-hours trading following the news. SpaceX is targeting a June IPO that could raise up to $50 billion, potentially valuing the company at $1.5 trillion.

Legal filings in Nevada suggest preparations for a merger, and market predictions estimate a 48% chance for a SpaceX-xAI deal and 16% for a Tesla-xAI combination by mid-year.f